Maths until 18 – a boon for pensions?
Pardon the Interruption
This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
Prime minister Rishi Sunak has set out a new ambition on Wednesday to make all pupils in England study some form of maths until age 18. How could a national numeracy push impact on the pensions sector in the long term?
In his first speech of this year, Sunak announced his ambition along with a series of other promises on Wednesday.
The UK is one of the only OECD member states that does not require maths to be taught until age 18, with just half of 16 to 19-year-olds studying any maths at all; among disadvantaged pupils, 60% do not have basic maths skills at age 16, and about 8m adults in England have the numeracy skills of primary school children, according to the government.
“One of the biggest changes in mindset we need in education today is to reimagine our approach to numeracy,” the PM said. “In a world where data is everywhere and statistics underpin every job, our children’s jobs will require more analytical skills than ever before. And letting our children out into the world without those skills, is letting our children down.”
It has been widely questioned whether the plan is practicable given the existing acute shortage of maths teachers. The headteachers’ union has called on the government to set out the evidence for the plan before embarking on a significant change affecting future generations.
Geoff Barton, general secretary of the Association of School and College Leaders, said: “There is a strong argument for developing a system which allows for greater subject breadth tailored around the needs of the student rather than simply bolting on more maths.”
FCA’s consumer duty puts spotlight on numeracy
For financial literacy, numeracy has long been identified as a problem and is coming into focus with the Financial Conduct Authority’s new consumer duty, due to be in force from 31 July.
The FCA identified low numeracy as a key risk factor for financial vulnerability eight years ago. Meanwhile, its 2020 Financial Lives report shows that more adults (17.7m or 34%) had poor or low levels of numeracy involving financial concepts compared with three years earlier, despite 22.9m (44%) being over-confident in their financial numeracy.
The incoming consumer duty means companies will have to make more effort to help people understand financial products, with some sectors looking to revamp their communications. Last February, the Association of British Insurers partnered with social enterprise Plain Numbers to help consumers make sense of insurance communications as 71% of people said better explanations of numbers used in insurance and long-term savings documents would help to improve their interaction with the sector.
IFoA: Numeracy is crucial for decisions on pensions and insurance
The Institute and Faculty of Actuaries said the ambition to close skills gaps in maths and as a consequence, in financial literacy, was “encouraging”. The large transfer of risks from institutions and government to individuals in recent years means people need to make life-changing decisions on pensions and insurance, making numeracy crucial, said IFoA president Matt Saker.
However, if the initiative is to gain traction and be delivered successfully, “it is vital that it is developed in a collaborative fashion across political parties and bodies already doing valuable work in this area” to provide a consensus for sustained action, Saker stressed, pointing to charity National Numeracy.
The IFoA said the government’s plans should include those who have already left school, helping them develop skills like household budgeting, and look at adult reskilling together with employers. All this could be done bringing in bodies like social mobility charity Progress Together, Saker suggested.
Numeracy charity wants focus to be on real-life applications
Charities see the greatest need in people having the ability to deal with everyday number tasks. The chief executive of National Numeracy, Sam Sims, said: “We look forward to hearing more about the government’s new approach. We will be looking for the new policy to focus on developing the kinds of skills that everyone needs to apply maths to real-life problems, at work and in life.”
Sims said poor numeracy was “holding the UK back”, limiting social mobility and contributing to unemployment, poor health and debt.
“Improving numeracy offers benefits right across society, helping people to get on in vital aspects of their lives at a time the UK really needs a skilled and confident population," he said.
