A study conducted by The Richmond Project, a charity founded by former UK Prime Minister Rishi Sunak and his wife Akshata Murty, has found that about half of young adults in the UK lack a basic understanding of key financial concepts. The research, which surveyed 10,000 people and is the largest numeracy study in the country to date, reveals a significant gap between the financial literacy of younger and older generations.

The survey tested knowledge of compound interest, inflation, and risk diversification, three fundamental areas of personal finance. Only 28 percent of respondents answered all three questions correctly, placing the UK behind several other developed countries, including Germany (53 percent), Switzerland (50 percent), and the Netherlands (45 percent). Conversely, 40 percent of adults answered either none or only one question correctly, indicating poor or very poor financial literacy.

The generational divide was particularly stark. Among adults aged 18 to 34, over half scored poorly in the financial literacy assessment—53 percent of those aged 18 to 24 and 51 percent of those aged 25 to 34 fell into the lower categories. In contrast, only 25.6 percent of individuals aged 55 to 64 and 20.3 percent of those 65 and older scored similarly low.

The study also found that older adults with a GCSE-level education generally demonstrated better financial skills than younger adults with postgraduate degrees. Specifically, 71 percent of people over 55 with GCSE qualifications scored well or very well, compared to 54 percent among postgraduates aged 18 to 24.

Sunak described the findings as "surprising" and suggested that older generations may have acquired financial skills through practical experience in daily life. He warned of “measurable economic consequences” for those lacking financial literacy and emphasized the need for broader education on numeracy to improve confidence with numbers.

The Richmond Project supports the UK Government’s plan to introduce compulsory financial education in all primary and secondary schools by 2028. The charity is also involved in developing core guidelines for the curriculum.

Lizzie Gaisman, chief executive of The Richmond Project, highlighted that while younger generations have access to more information than ever before, this may lead to confusion rather than clarity in managing finances. She noted that previous generations “learnt by doing” and tended to reflect more on financial matters in everyday life.

The study further revealed that men consistently outperform women in financial literacy across all age groups, though no detailed explanation was provided for this gender disparity.

Overall, the findings point to a critical need for enhanced financial education in the UK, particularly among younger adults, to better equip individuals in making informed financial decisions amid an increasingly complex economic landscape.