While most of you readers are pretty well aware of all things money here at The Savvy Scot, I have to say I was sadly not that surprised to read the findings of Legal & General’s recent research, reporting that 53% of adults in Britain say they have received poor financial education, or none at all. We spend almost 20 years at school, yet one of the most important topics that would set up great foundations for our adult life is being ignored.
Parents often expect the schools to do part of the child’s upbringing, and neglect to talk about essential matters as well.
Legal & General reports that the top five personal finance topics people understand the least are
1. Annuities
2. Access to personal pension plans
3. Auto-enrolment
4. Help-to-buy
5. and… Investments.
22% of adults have a hard time grasping the concept behind investing. Wow. How can you prepare your future if you are part of those one in five who are unfamiliar with how to allocate your money?
I also noted that none of the debt concepts, like debt consolidation or interest rate were part of the things people were unfamiliar with. Even more to be concerned about.
Out of people who approach retirement, a third don’t understand annuities and a quarter have no idea how to access their personal pension plan. Half of the interviewed workers also comment that they feel guilty about focusing on their finances for more than five minutes during their workday, which is when most of the institutions like banks are open, making it harder for them to plan their financial future after hours. Banks and financial institutions have surely made an effort those part years to expand their office hours, and to implement online banking 24/7, but still employees are worried about their management frowning upon their attempt to keep up with their finances.
To help adults become more familiar with complicated personal finance topics, Nigel Wilson, CEO of Legal & General is hosting a hangout on family finances tomorrow. You can ask any questions related to family money, and a panel of experts will help answer them. Joanna Elson from the Money Advice Trust, personal finance expert Esther Shaw and Independent Financial Adviser Stephen Womack will be in attendance.
You can ask your questions before the hangout, which will take place on Google+. It will also be made available on Legal & General’s YouTube page.
If you like a company, and it is trading publicly, how do you buy its shares? Can you go to your bank and say give me five shares of Primark? Is that cost effective to do it like that?
I am of those who don’t know how to invest. I see you often say investing in index funds is easy but I don’t know where to start.
Hi Sophie!
One of the options available for people like you (who don’t know much about investing but want to invest in index funds) are online investment advisors. Most of them invest in ETFs and charge a relatively small fee for the ongoing advice. Nutmeg, Zen Assets and Wealth Horizon (just to name a few) are currently available for the British investors. Lots of luck with your investments!
Is a company match always a good thing? If you change company do you take your pension with you or o you then claim from different pension plans a little money each?
My wife and I are thinking about combining our finances, but we are wondering how it will affect our pension plans if we get a divorce or when one of us dies?
I really wanted to start investing, but I don’t know what kind of investing should I choose. Do you have any advice for a beginner like me?
I had read that there are short, medium and long-term investment. Should I choose a short-term investment?
I learned a lot from this article and it has many great ideas here. It’s very helpful and useful. Thanks for sharing this article about these Top five most confusing financial topics revealed.
I’m glad that you came up with this topic. No one in Universities teaches about personal finances, that’s why many of us especially kids are in debts at a very early age.
Formal education lacks a lot of things, unfortunately. We master crucial life skills outside of school. It will be extremely hard to succeed in life without the basic understanding of how to manage your personal finances. Making a lot of money will not help you, if it all goes down the drain.