The latest annual Household, Income and Labour Dynamics in Australia (HILDA) report1, which has been funded by the Australian Government Department of Social Services for more than twenty years, shows financial literacy levels in Australia have gone backwards.
Analysis reveals that between 2016 and 2020, financial literacy in Australia has fallen for men, fallen further for women, and fallen most for the young (aged 15-24).
According to the HILDA report, “The unavoidable conclusion is that no progress has been made on improving the financial literacy of the Australian population since 2016, and in fact we have gone backwards.”
OECD backs financial education through the workplace
The findings of the HILDA report are backed up by the Australian Government’s National Financial Capability Survey 20212, which also found that women and younger Australians did not perform as well with respect to financial literacy. For these groups, dealing with money was stressful and overwhelming.
It's a scenario we find troubling because we know financial literacy can be life changing. Small steps made earlier in a person's life could make a big difference to their quality of life in retirement. The question is, how do we help people take that first step? The Organisation for Economic Co-operation and Development (OECD) believes employers, just like you, have a crucial role to play.
According to the OECD, employers are well placed to equip employees with the financial knowledge necessary for their financial wellbeing. Their Policy handbook on financial education in the workplace3 states, “Workplaces can be an effective channel to reach a wide audience of adults, including those who are vulnerable or under financial stress.”
Going further, the OECD argues workplace education has benefits for employers by improving employee morale and retention. “Beyond improving the financial well-being of employees, financial education in the workplace can bring additional benefits to employers in terms of greater employee productivity, satisfaction, motivation and sense of loyalty.”
Young workers turn to their employers first for financial education
The OECD discusses the growing importance of financial education that is delivered via the workplace – but what insights do we have regarding the employee appetite for workplace learning?
An ASIC survey of young workers revealed they turn to their employers first as the preferred way to learn about finances.
ASIC surveyed 3,000 Australians aged 15 to 21 to better understand the money challenges young Australians face. The results were published in the Young people and money report (December 2021)4, with additional insights from working groups that included educators, parents and young people.
As part of the survey, young Australians were asked how they would most like to learn about managing money – was it through their peers, social media, via money apps or online using bank or government websites? It came as no surprise to us at Rest that the most popular way to learn about finances was through their employer/workplace. We know our members generally look to their employers as a trusted source of information about superannuation.
How Rest can help educate your employees about super
Given most employers are not licensed to provide financial advice, we have a range of online content and education seminars which can help your employees learn about super.
To make it simple for your employees to find the information they’re looking for, the content on our Learning Centre is structured by life stage. The life stages cover employees who are starting out and need to understand the basics of super, those who are progressing through their careers, and those planning for and transitioning to retirement.
In addition to the content and tools available on our Learning Centre, your employees can also register to attend Rest super education seminars on topics of interest relating to super and retirement.
1. Roger Wilkins, Esperanza Vera-Toscano, Ferdi Botha, Mark Wooden and Trong-Anh Trinh (2022) The Household, Income and Labour Dynamics in Australia (HILDA) Survey: Selected Findings from Waves 1 to 20. Melbourne Institute: Applied Economic & Social Research, University of Melbourne. https://melbourneinstitute.unimelb.edu.au/hilda/publications/hilda-statistical-reports
2. National Financial Capability Survey 2021 https://www.financialcapability.gov.au/strategy/part3
3. OECD (2022), Policy handbook on financial education in the workplace, OECD Publishing, Paris, https://doi.org/10.1787/b211112e-en
4. ASIC Media Release March 2022 '02-052MR ASIC helps young people Get Moneysmart' https://asic.gov.au/about-asic/news-centre/find-a-media-release/2022-releases/22-052mr-asic-helps-young-people-get-moneysmart/