Cash management skills 'stubbornly low'

Man looking at paperwork Image copyright Thinkstock

More than one in five adults are unable to read a bank statement - evidence of "stubbornly" low financial skills in the UK, a report suggests.

Research by the Money Advice Service also found that four in 10 adults had less than £500 in savings leaving them at risk of financial shocks.

The service is launching a 10-year plan aimed at improving the UK's financial skills.

It aims to target people as they reach key points in their lives.

It wants various organisations to work together to improve financial skills from childhood through to retirement.

"This is a problem first and foremost for the individuals concerned and for their families, but it also has wider implications for society and the economy," said Andy Briscoe, chairman of the service's Financial Capability Board.

"The stubbornly low levels of financial capability in the UK can no longer be tolerated."

'Spend today'

The research included a survey of 5,000 people and consultation with other organisations.

It found that a third of those asked had difficulty calculating a simple interest rate. It also concluded that an estimated eight million people had debt problems but only one in six of them was seeking help.

It suggested that there was a "spend today, rather than save for tomorrow" culture and there was limited resilience to deal financially with unexpected life events.

However, those behind the new strategy to tackle these issues, being published on Wednesday, have decided against setting any specific targets at this stage.

The free, government-funded, Money Advice Service faces an imminent review of its own by the Treasury and Financial Conduct Authority. It recently underwent a major review, which concluded that it needed to cut costs and be more focused in its work.

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