The UK pensions system is so complicated that even the chief economist of the Bank of England can't make sense of it.
Andy Haldane, who was voted one of the most influential people in the world by Time magazine in 2014, said during a speech at a dinner that he did not understand the pensions system in the UK and that many financial advisors in the field don't either.
"I consider myself moderately financially literate. Yet I confess to not being able to make the remotest sense of pensions," Haldane said at the New City Agenda annual dinner.
"Conversations with countless experts and independent financial advisors have confirmed for me only one thing - that they have no clue either. That is a desperately poor basis for sound financial planning," he added.
Haldane said that new pensions freedoms have given people more control over their pensions that ever before. He contrasted this with a lack of general know-how among the public and warned that this knowledge gap could get worse over time.
Under new rules, the full single-tier state pensions is £155.65 a week, but these rules do not apply to anyone who reached the state pension age before April 2016. That age will be 65 for both men and women by November 2018.
Almost half of 50-65 year olds don't know what the full rate of the new state pension is, according to research by Which?
Haldane said that the problem came from the ways maths is taught, with little real-world relevance.
He called for classroom teaching to be linked to finance, so that people learned how to draw up a monthly budget of debits and credits, how to make sense of the APR on a loan, and how to decide between competitive savings, pensions and mortgage products.
He also suggested that more courses be available to adults to help them better understand financial matters.
For many, maths is a turn-off because it seems unrelated to their everyday lives; it lacks real world relevance. Sad to say, payday lenders have a greater resonance to many people than Pythagoras’s theorem,” Haldane said.
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