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The Importance of Financial and Pension Literacy in Closing the Financial Advice Gap in the U.K.

2025/05/26 by Julie Dick, Jacqueline Harvey · 1 voice
Business, Management and Accounting · Economics, Econometrics and Finance · #Financial Literacy, Pension, Retirement Analysis #Housing Market and Economics #Housing, Finance, and Neoliberalism

paper · pdf · doi:10.1017/s1474746425000272

openalex publication_date 2025/05/26 · openalex created_date 2025/10/10 · openalex updated_date 2026/05/21

Abstract

Decisions about how to draw one’s pension are complex. Individuals with poor pension literacy may risk making suboptimal decisions, especially in the absence of financial advice. This study found actual and perceived pension literacy to have opposite effects on advice seeking. Where high actual pension literacy increased the propensity to seek advice, high perceived pension literacy decreased it. After participants completed a test of pension literacy, they became aware of their pension knowledge, and some changed their minds about seeking advice. The study highlights the importance of pension education and has implications for regulators and industry professionals wanting to increase the uptake of financial advice.

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