Financial Literacy

It’s amazing the number of people with lack of numeracy skills, even for simple things, like paying their bills, and making problems at their jobs.

Could it be a growing generational question (time spent in gaming and social media) and/or an educational problem?

Here’s a number that should concern us all — about 20m people in Britain have poor numeracy skills.

It is estimated that just under half of working-age adults in the UK have numeracy skills lower than that expected of an 11-year-old child, causing big problems in the workplace.

Dame Sharon White, chair of John Lewis, made headlines last month when she complained that the retailer had been forced to give basic numeracy classes to its younger staff.

However, this also has a massive impact on how well people manage their personal finances and their ability to comprehend household bills.

But what about mortgages? A recent Habito study of 2,000 homeowners found that more than a quarter had rolled off a fixed-rate mortgage on to their lender’s standard variable rate (SVR), paying average interest of 3.5 per cent when the best rates are less than half of this. The difference was costing some of them over £4,000 per year.

Worse, a further 18 per cent of respondents confessed they didn’t know what rate they were paying — and one in 10 of the sample didn’t have a clue what the term “SVR” meant (clue — it’s shorthand for the “rip off” rate).