How many people understand their superannuation details or insurance options (life, car, house, boat, or any other insurance)? What about the complexities of your medicine dosages and when you need to take them, particularly when you are unwell.
Last night, the ABC Melbourne, Lateline program interviewed David Whitely, the chief executive of Industry Super Australia, http://www.industrysuper.com which represents the country's largest superannuation funds, including HESTA, HOSTPLUS, Cbus and Australian Super. The discussion was about the proposed changes the Federal government are considering to the Future of Financial Advice laws. www.abc.net.au
Excerpt from the Lateline Program: http://www.abc.net.au/news/2014-03-24/fofa-on-hold/5342552
"EMMA ALBERICI (Journalist): Well in fact, Senator Arthur Sinodinos on this very program just a few weeks ago said that his advice to consumers was that they needed to get more informed because, "... at the end of the day, that's the best sanction on financial advisors". What do you think of that tip from Senator Sinodinos?
DAVID WHITELEY: Well I think the thinking about superannuation and how people invest and save for their retirement has moved considerably in the last decade. It's now recognised that people tend to discount the future. That is, that they pay much more attention to what's occurring today than they might do 40 years down the track. It's quite clear that there's relatively low levels of financial literacy across the Australian community. And when we have a compulsory super system or pension system, we need to make sure that the regulatory framework is designed to take into account how we know people behave; that is, the system is designed to act in people's best interests. "
So where does the data come from to confirm this statement from David Whitely?
Data released by the ABS in 2013, as part of the Program for the International Assessment of Adult Literacy Competencies (PIAAC) has some significant data on prose literacy, numerical literacy and problem solving in technology-rich environments literacy. www.abs.gov.au #4228
Often we cite the Prose literacy. Non-functional literacy (Prose) in Australia is 44% or 7.3 million Australian adults.
In fact numerical literacy, which involves reading, understanding and interpreting numbers and mathematical concepts and information is even more significant. Current data from 2013 has identified “53.5% or 11.7 million adult Australians do not have the skills in numeracy to be able to complete Level 2 tasks, or below, rating them as being non-functional in numeracy.”
“Tasks from level 2 include a range of common contexts where maths content is fairly explicit or visual...... Involves calculating with whole numbers and common decimals, per cents and fractions; simple measurement and spatial representation; estimation; and interpretation of relatively simple data and statistics in texts, tables and graphs.” www.abs.gov.au #4228
Read more detail on PIAAC in my November 2013 blog. http://accesseasyenglish.blogspot.com.au/2013/11/notes-on-current-adult-literacy-skills.html
If it is recognised by the financial industry there are "relatively low levels of financial literacy”, maybe there are other strategies that need to be considered.
Can information be written in everyday words and language and style, so that we do understand and can be better informed about our superannuation and other financial needs? Yes. It is possible to write information using everyday words, terms and styles of writing.
Think about other times numeracy is part of the reading you do? I will start a list for you. See how many other things you can add to this list.
· Work entitlements
· Pay and Super Payments
· Salary packaging or Salary sacrifice
· Mobile Phone contracts
Let's talk about how your organisation can improve how information is presented so more Australians have an opportunity to be informed about their choices in their financial literacy and other areas of their life.
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