The government’s Growth and Competitiveness Strategy signals a welcome shift in ambition. Encouraging more people to save and invest is the right objective – not just for households, but for the wider economy.
But ambition alone will not deliver results. If these reforms are to succeed, they must be underpinned by a long-term commitment to financial literacy and access to trusted advice.
Our recent Growth Report, developed with UK Finance and KPMG, highlighted just how critical financial literacy is. Across all ages and demographics, gaps in financial literacy prevent people from making informed decisions, engaging with financial services and building long-term wealth.
These gaps are not merely a matter of individual wellbeing. They constrain the UK’s ability to channel savings into productive investment and increase future reliance on the state.
While regulatory efforts to curb risks are welcome, the dangers of misinformation are real
The consequences are already clear. Many individuals default to cash savings, even as inflation erodes value, while products such as stocks and shares Isas remain underutilised.
Concepts such as share ownership, funds and other long-term investments are generally poorly understood, limiting confidence to participate in more complex products, from equities and investment trusts to bonds.
Without the knowledge to navigate these options, individuals risk missing opportunities to grow wealth, while the economy misses out on capital that drives growth and innovation.
At the same time, younger generations are increasingly turning to social media platforms and so-called ‘finfluencers’ for guidance. Our research shows that 75% of under-45s have bought, or considered buying, a financial product based on online content.
While regulatory efforts to curb risks are welcome, the dangers of misinformation are real. Poor decisions early in life can damage confidence, weaken trust in financial services and limit long-term engagement with investment markets.
The government’s Curriculum and Assessment Review presents an ideal opportunity to deliver the step change that is needed
Financial education must therefore be lifelong. Schools must embed financial literacy effectively into the curriculum, supported with the resources teachers need to deliver it.
A decade on from its addition, coverage remains patchy, and for many institutions it is still optional. The government’s Curriculum and Assessment Review presents an ideal opportunity to deliver the step change that is needed.
But learning cannot stop at school. Key life moments, such as starting work, buying a home, or preparing for retirement, present opportunities for practical financial education. Workplace programmes, midlife financial check-ins and targeted wellbeing initiatives can make a real difference.
PIMFA members are already helping. For instance, by offering workshops to prepare younger family members for inheriting wealth, or providing staff sessions on retirement planning and Isas. These programmes show how financial education can be embedded throughout life, helping people make confident, informed decisions.
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Regulation must also evolve to support these efforts. Many consumers see financial advice as unaffordable or unnecessary until they reach a certain threshold, while firms face real constraints. Current rules can make personalised support uneconomical for those with modest wealth, and the risk of retrospective action adds further complexity.
The government’s proposed ‘targeted support’ regime is therefore essential, bridging the gap between guidance and advice, and enabling greater retail access to products and services.
The reforms announced through the Mansion House and Leeds initiatives are positive and welcomed. They encourage investment and broaden access, but success depends on people being confident enough to take the next step.
Financial literacy, supported by advice from our sector, is an important missing link. Confidence and understanding enable participation in more sophisticated investments, which in turn drives capital formation, innovation and long-term economic growth.
Our sector is ready to play its part, providing guidance, programmes and resources that make lifelong learning a reality
Industry can play a crucial role, but government leadership is essential. With the Budget on the horizon and speculation about further changes to how we save and invest, the fundamentals must not be overlooked. Reforms can only succeed if people understand them, and if a new generation feels equipped to make confident choices.
That means embedding financial education in schools, reinforcing it throughout working life and ensuring regulation supports access to advice. Our sector is ready to play its part, providing guidance, programmes and resources that make lifelong learning a reality.
The UK has the talent, institutions and ambition to lead globally. But if we want to move from a nation of savers to a nation of investors, we must first ensure that people have the confidence and knowledge to make that journey.
Financial education is not an optional extra. It is a foundation on which sustainable growth, resilience and participation in investment markets are built.
Liz Field is chief executive of PIMFA
