Press Release

High numeracy in old age correlated with higher savings, better care planning, and even with more sex!

Think tank argues urgent need to better understand “what works” in terms of improving financial outcomes for older people. ILC-UK question whether we have adequate evidence that financial education makes a difference in old age.

New analysis of the English Longitudinal Study of Ageing (ELSA) by the International Longevity Centre UK (ILC-UK) reveals

  • Only 1 in 4 English people aged 50+ can perform a simple compound interest calculation (1 in 3 men and 1 in 6 women)
  • Greater numeracy is associated with higher saving levels and better planning for care
  • Surprisingly and perplexingly, older people who have good numeracy, tend to have sex more often than those who don’t.

Presenting new evidence at the ILC-UK National Retirement Income Summit today, ILC-UK Research Fellow, Dr Cesira Urzi Brancati will argue that whilst there is strong evidence of a link between good numeracy and good financial outcomes, the evidence of what works in terms of improving financial literacy is limited. 

With greater responsibility for financial wellbeing in retirement being placed on individuals, Dr Urzi Brancati will argue that urgent action is needed to better understand how financial capability links to good outcomes. Dr Urzi Brancati will add that the financial wellbeing of older people is being potentially undermined by poor numeracy.

ILC-UK analysis of ELSA questions highlight the challenge of poor numeracy in old age

If the chance of getting a disease is 10 percent, how many people out of 1,000 (one thousand) would be expected to get the disease? 1 in 10 older men and 1 in 5 women got this wrong

A second hand car dealer is selling a car for £6,000. This is two-thirds of what it cost new. How much did the car cost new? 68% of older men and about half the women got this right

If 5 people all have the winning numbers in the lottery and the prize is £2 million, how much will each of them get? 69% of older men and only 45% of women got this right

ILC-UK analysis reveals that average household savings increase with numeracy, as does the extent to which an individual had planned for long term care. Other literature finds that greater numeracy is correlated with better outcomes on many financial domains including financial management; shopping around; planning for retirement; investment; debt.



But during the presentation, Dr Urzi Brancati will point out that the correlation may not be causal and that we need to much better understand the relationship between numeracy and good outcomes. Dr Urzi Brancati highlights this by pointing out that there is even seemingly a correlation between good numeracy and whether an an older person has had sex in the last year.

Speaking at the Retirement Income Summit, Dr Cesira Urzi Brancati said

“Increasingly, responsibility for our financial wellbeing in retirement is being placed on individuals rather than the state. Yet we believe that potentially many millions of people are ill--equipped to make the best financial decisions.

It is clear that good numeracy appears to be correlated with good financial outcomes. But in fact, the impact of measured financial capability on financial behaviours is ambiguous. Perhaps some people save more and can give more correct answers simply because they are smarter. And perhaps people have saved more or invested better and therefore have learnt the working of compound interest, rather than the opposite.

Even if we were absolutely convinced that you can “teach” financial capability, it isn’t clear we have adequate evidence as to what actually works for older people.

We very much welcome the recently announced investment by the Money Advice Service to help us better understand more about how to improve financial capability.''

Dr Cesira Urzi Brancati was speaking at the ILC-UK National Retirement Income Summit, attended by 160 industry and consumer experts in London today. 

The ILC-UK’s Second Retirement Income Summit was announced 10 years on from the Pensions Commission. The Pensions Commission painted a future where individuals would need to do a combination of working longer, saving more, or paying more tax. The Commission argued that a failure to act would lead to poorer pensioners.

In April this year, ILC-UK argued that whilst progress has been made since 2006, there is much to do. The analysis ( revealed that:

  • The average age of exit from the labour force is increasing but it is still below what it was in the 1960s and 1970s
  • In fact, the average time spent in retirement continues to increase
  • Auto-enrolment has delivered a growing number of employees with workplace pensions
  • But median contribution rates are low and a growing proportion of us have no savings. Final Salary pension coverage continues to fall
  • Younger people are less well placed than previous generations to save and may attract lower long term returns on their savings
  • Effective tax rates have been falling but have increased more recently
  • Spending on pensioner benefits are slightly above the long run average as a percentage of GDP

ILC-UK’s Retirement Income Summit is being hosted by the Chartered Insurance Institute on 10th June 2016. Other speakers at the event include: Ben Franklin (ILC-UK); Baroness Jeanie Drake; Steve Webb (Royal London); Gregg McClymont (Aberdeen Asset Management); Professor David Blake (Cass); Chip Castille (Blackrock); and Michelle Cracknell (TPAS).



ILC-UK analysis, has been drawn from the English Longitudinal Study of Ageing (ELSA), a survey of people aged 50+ living in private households in England. Beginning with interviews in 2002 on a nationally-representative sample derived from the Health Survey of England, ELSA has since gathered an extensive range of health and socioeconomic information from respondents every two years.

The data were made available through the UK Data Archive. ELSA was developed by a team of researchers based at the NatCen Social Research, University College London and the Institute for Fiscal Studies. The data were collected by NatCen Social Research. The funding is provided by the National Institute of Aging in the United States, and a consortium of UK government departments co-ordinated by the Office for National Statistics. The developers and funders of ELSA and the Archive do not bear any responsibility for the analyses or interpretations presented here.

David Sinclair ( 07543646992) or David Eaton ( on 07531164886)


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