London business title City AM today launched a campaign to improve ‘financial literacy’by boosting the number of students who study A-Level maths, just weeks after the Evening Standards launched its campaign to improve literacy rates in the capital.
City AM said it had already received backing from education secretary Michael Gove, who used a speech in the City today to urge businesses to donate to the charity Further Maths Support Programme (FMSP), and claimed a lack of statistical skills meant most people were unable to understand the causes of the global financial crisis in 2008.
In a comment piece editor Alister Heath said: ‘Tragically, millions of people are unable to grasp fully even the most basic of financial products, such as mortgages or savings accounts. In an era when self-reliance and financial independence are essential, this is a catastrophe and means that many families don’t have the basic tools to run their lives properly.
‘Millions are unable to work out how much they need to save to retire; others don’t understand the consequences of using finance to buy cars or how much extra they would end up paying. Even the basics, such as the concept of compound interest, are a challenge. There is also a limited understanding of economics or of how to value assets, such as property, making bubbles much more likely. It is a shameful failure.”
On a budget of only £1.5m a month FMSP has doubled the number of students studying maths at A-level from 5,627 to 11,312 – City AM’s goal is to double FMSP’s budget to £3m over the next year, and urged readers to ‘take out your credit cards”.
‘Financial institutions should see donations as a good way to help rebuild their reputation,’added Heath.
‘In the short-term, donations would deflect from the populist anti-City rage. In the longer-term, better educated consumers would make better decisions, reducing mis-selling or mis-buying scandals; people would be more comfortable with financial products, and finance in general, and therefore less likely to view banks, funds and insurers as inherently evil or corrupt.
‘Most important of all, however, building a more numerate and financially literate society would help millions of people regain control of their lives.”
The new campaign comes two weeks after City AM claimed victory in its campaign against ‘bureaucrats’ battling plans to demolish the Broadgate estate in the City.
The Evening Standard launched its literacy campaign on 31 May, when it revealed that around one million people in London cannot read and declared the city was in the grip of a ‘literacy crisis”.
The Standard’s campaign was also backed by Gove.