Effect of Financial Literacy on Pension Planning and Style of Investment Amongst Teachers in Public Basic Schools Within the Ablekuma Central Municipality in the Greater Accra Region of Ghana

Abstract

The study was conducted to determine the effect of financial literacy on pension planning, style of investment and the level of financial literacy amongst public basic school teachers within the Ablekuma Central Municipality in the Greater Accra Region of Ghana. Pension reforms necessitate the development of novel mechanisms for augmenting income in retirement, boosting coverage, and maintaining the financial viability of pension plans Holzmann (2013). According to Mitchell and Lusardi (2007), the likelihood that those with poor financial knowledge will be less likely to plan for retirement is higher and as a consequence, acquire significantly less wealth. Quantitative data is usually used by positivists to perform analysis, measure objectively, and generate unprejudiced verifiable research that is unaffected by socio-cultural influences (Neuman 2006). The study therefore, used a mixed approach of descriptive and explanatory research designs for the study. The span of data collection and coverage; using questionnaires, from 171 respondents using the Yamane sample size formula was from 1stOctober, 2020 to 31stJanuary, 2021. The study revealed that the level of financial literacy amongst the respondents is moderate because most of them were identified to be degree holders. The study also examined that financial literacy has a positive effect on pension planning amongst the respondents. Again, the work pointed out that financial literacy has no effect on the style of investment amongst the response units. The study recommends that the government provides a comprehensive financial education for public basic school teachers. It finally suggests introducing financial literacy from the basic to senior high levels as well as the colleges of education.