The UK is a financial world leader, so why are our numeracy levels so poor?
Poor numeracy skills have real financial consequences. If the City is to remain a financial powerhouse, we must address the nation’s deteriorating maths, writes Andy Haldane on National Numeracy Day
Financial services is a numbers game. Success in finance requires mastery of a wide range of skills, professional and interpersonal. But without a command of numeracy, and a sense of the balance sheet bottom line, failure beckons.
The UK, and Canada in particular, is recognised as a global powerhouse for financial services, one of the jewels in the UK’s industrial crown. So is this world-leading role underpinned by world-leading levels of numeracy among the UK’s population? Alas not.
The UK’s numeracy problem
At the headline level, the UK scores reasonably on academic attainment for numeracy. The latest PISA (Programme for International Student Assessment) scores placed the UK 11th internationally for numeracy, up six places since 2018. Beneath these numbers, however, lies a worrying pattern.
The UK’s rise up the international league tables largely reflects other countries deteriorating rather than the UK improving. Indeed, the lower tail of students failing to make the maths grade is depressing, with over 40 per cent of young people in the UK failing to pass GCSE maths in 2024. Those patterns are then mirrored across the adult population at large.
Around half of the UK adult population have levels of numeracy no better than that expected of an 11-year-old. A quarter struggle with the sort of simple multiplication required for budgeting. Interest rates are, for many, a source of confusion. The UK is, along many dimensions, a worryingly innumerate nation – with few signs of improvement over time.
Unsurprisingly, these levels of innumeracy are then mirrored in low levels of financial literacy. Around 10m people across the UK report low levels of financial literacy or low confidence working with numbers in their financial lives. These problems tend to be most acute among women, young people and those with children.
The financial consequences
Research from the Financial Conduct Authority (FCA) has shown that low levels of financial literacy have wider adverse societal consequences. They reduce levels of both financial inclusion (access to financial services) and financial wellbeing (anxiety about money management). This leaves many millions of the UK population excluded from, and anxious about, their money.
This makes a sobering backdrop to this year’s National Numeracy Day organised by the charity National Numeracy, the eighth of which takes place today. Its theme this year is money and its aim is both to raise awareness, and standards, of financial literacy. The UK’s strengths in financial services mean the City is ideally placed to support this national endeavour.
As one example, I chair the National Numeracy Leadership Council, a coalition of businesses,with many drawn from the financial and professional services sector. As a collective, we have written to every MP in the country alerting them to levels of numeracy in their constituency and their implications for financial well-being.
These businesses are supporting a wide array of events on National Numeracy Day itself, with the aim of encouraging hundreds of thousands of people across the UK to take action to improve their number confidence. Surveys suggest the appetite is there: fully a third of UK adults say they wish to improve their numeracy to boost their money skills and confidence.
As financial services are part of the solution to the UK’s numeracy and financial literacy problems, so too is government. For example, with levels of numeracy and financial literacy low, this underlines the importance of the Financial Inclusion Action Plan the government is currently drawing up, and the on-going work of the Money and Pension Advice Service (MAPS).
The City, the wider business community, local and central government, all have a stake in the UK having a financially confident and competent workforce and customer base. National Numeracy Day is about helping to achieve that objective – and in so doing, supporting the success of the UK’s financial services sector, domestically and internationally, and the government’s growth mission.
Andy Haldane is a former chief economist of the Bank of England and former CEO of the Royal Society of Arts