Lessons for your financial life - in the classroom and outside of school
Acerbic comedian Tom Allen made a good point during a recent TV appearance.
He questioned why concepts like Pythagoras are taught to children who would probably never use them again.
“Why not: how a pension works? Wouldn’t that make more sense?” he opined.
OK. I didn’t see him. I’m not even sure I can place him but a colleague mentioned this exchange and it does fit with something I do know about and have written before about: financial education.
The importance of understanding
Speaking as a Maths graduate in a profession made up almost exclusively of those for whom the spreadsheet is second nature, I don’t want to downplay the intellectual rigour of advanced study.
But I do think he had a point in what was not so much a punchline as a home truth.
Many folk are nonplussed or feel ill equipped to manage their financial wellbeing.
It’s getting better. Much has been written about the holistic approach to getting a grip of your money in a way that will enhance your life and reduce the stress it can bring. Indeed, Punter Southall Aspire, our financial planning and retirement savings business, goes out of its way to impart useful, pragmatic information on this area and it’s not alone in doing so.
Fintech has helped
The fact remains that if people feel more confident about managing what they have because they have been equipped with some basic principles, so much the better - it’s a pretty important life skill to learn.
Fintech has helped to create more of a learning opportunity with online calculators and tools to guide you on how to manage your income, explore the opportunities of investment and demonstrate how savings and pensions can mount up over the years.
Companies are even styling financial guidance as a social media conversation to try to engage younger people: the smartphone tutorial that doesn’t feel like homework must be a positive step forward.
There will be many who glance at my blogs from time to time for whom this is stating the obvious but beyond our world, there is a genuine need to re-state the tenets of making, spending, budgeting and, above all, saving money.
If this is one part of the puzzle, another piece which has been stubbornly hiding for sometime may well also reveal itself soon.
Pension dashboards are well established in countries like Denmark and Sweden. If you have an account, you can see what you’ve saved across all your schemes and factor in scenarios to see how much you will have and when. It’s a way of financial life for our Scandinavian neighbours.
These dashboards offer a clear headline and compelling engagement for ongoing, personal financial education across the Nordics. Why not here? None of us is too old to learn something new.
So it’s a step in the right direction that the much-delayed plan to introduce something similar in the UK, albeit a much larger market, is again moving forward with the establishment of a Pensions Dashboard Industry Delivery Group .
It’s fair to say that we’re behind the curve on this (Denmark’s has been in place since the late ‘90s).
If the industry and government can work in cooperation, this must stand a good chance of moving from concept to reality - and will plainly be a benefit for everyone with a pension.