Financial literacy among British adults has declined over the year, despite personal finance issues ...
Financial literacy among British adults has declined over the year, despite personal finance issues taking centre stage over the past 12 months, according to Abbey.
In August 2007 Abbey set a GCSE level personal finance exam among a representative group of adults, and found that one-in-ten (5.9 million) would fail to achieve the 40% mark needed to gain GCSE grade C. A repeat of the exercise, among 1,054 adults, one year on shows the number of adults failing to achieve a C has increased by 1.2 million adults. The 18-24 year old group, slipped from an average score of 56% in 2007 to 53% in 2008.
Wrong answers included: 88% did not know they had six weeks to pay a credit card before accruing interest, up from 86% last year; 38% failed to explain negative equity, against 47% last year; 25% were unaware that failure to pay a secured loan meant their house could be sold to pay for it, up 2% on last year; and 18% did not know what hire purchase meant, against 12% last year.
Steve Shore, banking director at Abbey, said: "While most people are in the realms of a GCSE pass, the failure rate has increased by over one million. Quite worrying given that the credit crunch and cost of living has dominated the front pages for the past 12 months and people say they are more interested in understanding their finance than ever before."
One-in-four adults matched last year's results by scoring an A*, but straight As were down on last year by 2% to 28%. A grade B was claimed by 22% (up 1% from last year) but Cs fell from 13% to 12%.
