Is there a connection between people’s financial health — their ability to understand financial products, save and make good financial decisions — and the stability of the whole financial system? This is becoming an urgent question as the economic fallout of Covid-19 has exposed the financial vulnerability of those at the margin, in developing as well as developed countries.
In the UK, for example, even before the pandemic, research published in 2018 suggested that more than eight million people were over-indebted and between a fifth and a quarter of adults had less than £100 in savings. A more recent survey commissioned for the Financial Times found shortcomings in financial understanding in 2021, too.
