The findings come from the global investment company’s new abrdn Savings Ladder Index. The index will track levels of and approaches towards savings and investments over time among the public. It will also measure how likely people are to start saving and investing more via a ‘Propensity to Save and Invest’ score.

Crucially, the index will also regularly gauge UK adult financial literacy for the first time, to abrdn’s knowledge, which abrdn believes is vital if financial education is to be funded at scale by the government. The OECD collates and publishes data on adult financial literacy levels across 39 countries, and it is striking that the UK does not take part.

With permission from the Global Financial Literacy Excellence Centre, abrdn asked its “Big 3” financial literacy questions, which are used as an international standard for comparison. The research suggests that 44% of UK adults have poor financial literacy, extrapolating to 23.3 million UK adults.

The abrdn Savings Ladder Index was conducted by Opinium Research amongst a nationally representative sample of 3,000 UK adults.

The index found that UK adults have:

• An average Propensity to Save score of 53/100

Measures understanding of savings products, likelihood to increase savings in the next six months, likelihood to take out new cash savings products in next six months, and confidence in taking out and managing savings products.

• An average Propensity to Invest score of 37/100

Measures understanding of investment product, likelihood to increase investing in the next six months, likelihood to take out new investment products in the next six months, confidence in taking out and managing investment products, how much of a priority long-term investing is, enjoyment of reading about investments, risk tolerance.

• An average Economic Outlook score of 46/100

Measures confidence in the UK economy, confidence in the UK stock market, and how confident they are about their personal financial situation.

• An overall “Propensity to Save and Invest” score of 45/100.

This was calculated by combining people’s propensity to save, their propensity to invest and their economic outlook.

Respondents with a strong propensity to save and invest were allocated a score of 100/100. At the other end of the scale, where responses were seen as unlikely to save and invest, respondents were allocated a score of 0/100. The economic outlook pillar also gave a 100/100 for a positive outlook, and 0/100 for negative.

abrdn’s Savings Ladder manifesto was launched earlier this year, highlighting the nation’s on-going enthusiasm for home ownership. In it, abrdn proposed that building a similar momentum behind saving and investing could transform our future financial health. Looking ahead, the company will be measuring people’s propensity to save and invest every six months.

Sarah Moody, abrdn chief corporate affairs and sustainability officer, said: “For decades, people in the UK have been encouraged to place property at the centre of their financial lives. If we are to avoid a looming retirement crisis, we now need to generate the same momentum behind saving and investing.

“Any future government should be urgently considering policy interventions – including the doubling of minimum pension contributions and scrapping stamp duty on UK shares and investment trusts – to kickstart the change in habits that the country will need in the years ahead.

“Better financial education is also vital if we are to encourage a culture of investing for the long-term, with our research suggesting that poor financial literacy is hampering people’s long-term financial health.”

In its Savings Ladder Manifesto, abrdn made several policy recommendations for how to address the savings and investment crisis and encourage a “Savings Ladder” culture in the UK. They included:

• Simplifying the ISA system
• Scrapping stamp duty on UK shares and UK domiciled investment trusts
• Doubling minimum pension contributions to 16%
• Introducing a shake-up of financial education

To improve levels of financial education, abrdn has called on government to:

• Extend mandatory financial education to primary schools and Sixth Forms in England to ensure fewer young people miss out on a financial education.
• Integrate finance into relatable subjects, from maths, economics, citizenship and food tech. Scotland already integrate personal finance across the curriculum, and abrdn would like to see consistency across all four nations.
• Discuss a new GCSE and sixth form qualification that focuses on financial skills.