Explaining how pensions work might alarm rather than empower – strongly disagree….

Pauline Skypala:

What is the difference between per cent and percentage points? I was pulled up on this some years ago soon after joining the FT, and have since discovered many others, including prominent academics, who are not aware of the distinction.

Does it matter? For the sake of accuracy, yes it does. Given the general lack of numeracy and financial understanding though, it is a minor detail.

The financial industry has long maintained that financial education is the missing factor in making us all better customers for their wares. As financial decision-making is increasingly passed from institutions to individuals and becomes more and more complex, the apparent need for better education becomes more pressing.

Few would disagree that an appreciation of interest rates, compound interest, annual percentage rates and inflation should be taught as standard to all school children. It would not go amiss if they learned about the stock market either.

That alone, though, would not necessarily equip them to make decisions about how to invest for retirement, say. There is a distinct lack of agreement about how to do that among the professionals, for a start. There is also no agreement on the extent to which a better understanding of investment risk would lead to better decision-making.

A recent publication by Allianz, the insurer, reveals a belief on the part of some contributors that financial education would prevent the recurrence of a 2008-style crisis and contribute to lowering wealth inequality, while others maintain it is all too complex and we should leave decisions to the experts.