The FT Financial Literacy and Inclusion Campaign (FT FLIC) unveiled its strategic plan to boost the financial literacy of young people, women and disadvantaged communities at an event hosted by Roula Khalaf, editor of the Financial Times.
The plan will develop educational programmes to tackle financial literacy, initially in the UK and then around the world. It will seek to warn people about potential financial traps as well as empowering them to realise their aspirations. It will also campaign for policy change and clearer product communication by financial companies.
“Improving financial literacy for people that need it most, will empower and build financial resilience amongst communities that have faced growing inequalities exacerbated by the pandemic and austerity,” said Aimée Allam, executive director of FT FLIC. “We have now outlined our ambitious goals to improve financial literacy, and our success will be determined by our ability to achieve these goals in an effective and measurable way.”
A survey, commissioned for the Financial Times by Ipsos Mori, reveals shortcomings in financial understanding among four constituencies that have clear gaps relative to the national average: deprived areas, the young, women and ethnic minorities.
According to the research, 90% of the 3,194 people polled across England learnt “nothing at all” or “not very much” about finance at school. The research also found that barely half of 3,000 respondents were able to correctly compare the costs of borrowing via credit cards or bank overdrafts, regardless of their wealth, ethnicity or gender.
Not only will FT FLIC provide financial educational content for individuals and teachers, it also intends to lobby for education policy to change, in particular pushing for financial literacy to be integrated into school curriculums. FT FLIC will also focus on helping close the financial literacy gap for women and communities marginalised from accessing mainstream finance.
FT FLIC will partner existing charities and other organisations in financial education, and become a hub for the aggregation of the best materials, as well as developing its own content.
Patrick Jenkins, the FT’s deputy editor who chairs FT FLIC, said: “According to the World Bank, two in three of the global population, including one in three in the UK, are financially illiterate. If that were true of language literacy it would rightly be regarded as a scandal. Happily getting on for nine in 10 people around the world are now able to read and write. But why is it not regarded as a scandal that financial literacy levels are so low?"
Speaking at the launch of FT FLIC Gordon Brown, former Prime Minister of the United Kingdom, said: “In surgeries, I came face-to-face with constituents who could not manage their finances or pay their bills, who racked up debts and fell into the hands of money lenders. I saw not only the despair that this brings and the impact it has on physical and mental health but the need for far greater financial literacy. Financial worries have been exacerbated by the pandemic and will certainly worsen when six million families in the UK find their universal credit is cut by £20 a week. I welcome this initiative to create an umbrella foundation that will not only work with current providers at the grass roots level, but it will also seek changes to policy.”
The launch of FT FLIC follows 15 years of successful FT seasonal appeals that raised more than £19.5m on behalf of charities and supported many worthy causes.