Reeves urged to drive financial literacy in Spring Statement
In what will be a busy week for the Chancellor, Rachel Reeves has been urged to not forget the importance of improving financial literacy in her Spring Statement.
Jordan Sinclair, the president of financial services firm Robinhood UK, told City PM the UK has “the ingredients in order to improve” but now was the time to turn “words into action.”
“Without meaningful change sooner rather than later, the broader population could miss out on essential long-term wealth-building opportunities,” he warned.
He flagged the “huge issue” that only 26 per cent of the UK population have invested in the stock market, according to research from Finder.
Meanwhile, Nasdaq data shows over 60 per cent of US adults hold stocks.
Sinclair said: “The UK has a job on its hands more broadly to ensure that individuals are more educated before starting their investing journey.
“Money is something that impacts all our lives, yet many consumers don’t have the foundational knowledge they need to manage it with confidence and make sound financial decisions.
Sinclair’s calls come as research from UK Financial Capability found 39 per cent of Brits do not feel confident managing their money.
He said action on financial literacy can impact growth in the short-term, but noted the value of longer-term prospects.
“If you set up, from a social economic perspective, customers and consumers to be more confident with their money that in turn means that they’re more confident to not just hold their money in cash,” he added.
The government has pledged to unleash growth across the economy and Sinclair argued strengthening financial literacy offers a direct avenue.
Reeves has also been urged to reduce the £20,000 tax-free annual limit on cash ISAs to £4,000 to boost investment in stocks and shares.
“I think [financial literacy] has been talked about a lot.
“The City Minister Emma Reynolds talks about it a lot, HMT talks about it a lot – I think there’s a lot of discussions, so I do think it is a focus area.
“The exciting bit is if we can unlock a few of these initiatives and turn talk into action and then use these amazing technologies that we’ve developed, then you do see some change over the long term.”