Things we can learn from other countries about money

The UK spends a lot of time genuflecting about what Australia does with its pensions. So what can we learn from the Aussies, and other countries, about money? Edmund Greaves considers his experiences from other cultures.

I am fortunate to have something of an international background. My mum was an Italian who grew up in South Africa before coming to the UK in the 80s.

I have lived and travelled in several countries over the years, including the Netherlands, Belgium, Argentina and South Africa.

We have particular ways with our money in the UK, and while it would serve no one to make sweeping generalisations, there are things us Brits can learn from other cultures about money. Could that potentially leave us better off?

Australians and their money

Fortunately, on this week’s Mouthy Money podcast, I had the assistance of an Australian living in the UK to dig through some of the cultural differences around money.

Hope Coumbe is editor of Professional Adviser, a financial services industry publication which speaks to the financial advice community. Hope also has a lot of experience talking about pensions too, making her well placed to comment on the idiosyncrasies of Aussies and their money compared to us Brits.

The standout difference according to Hope was that Brits are keener to celebrate payday. Getting a ‘cheeky takeaway’ or splashing out on an evening’s entertainment is anathema to Aussies, where the cost of living has been high for a long time, and the culture is much more geared toward saving.

Hope was also clear that there is much we can indeed take from Australia’s pensions system. This is a foible of political discourse in the UK – we spend a lot of time genuflecting to the brilliance of the Australian system, and for the most part are about 20 years behind them in terms of innovation.

But there is one key difference between ours and our antipodean cousins’ retirement system – Australians don’t in practice have a state pension. This makes the jeopardy of ensuring a functional and successful pensions system much higher for Australians who will only have themselves to rely on in retirement.

There’s a bit of a kicker here though – the reason why the UK is not as far along the path on private pensions as Australia is because of the legacy of the state pension. But the state pension looks evermore in doubt, between funding exigencies and rising age requirements.

The truth is that those of us under the age of about 50 have a good chance of never seeing the state pension as it becomes increasingly unaffordable and our demographic makeup gets older (leaving less taxpayers to fund the system).

The simple fact of the matter is that there is no state pension ‘fund’ and you and I are not squirreling away money with the Government. They, in fact, pay the state pension out of general taxation.

And with all the major political parties making increasingly compromised promises about maintaining state pension payment and increase levels, its existence looks increasingly absurd.

So what to make of this from an Aussie perspective? The reason they never set up a state pension system and opted to develop a robust private pension system is that it is ultimately staggeringly more sustainable than ours. Once upon a time they looked at what the UK had and decided “thanks but no thanks, mate.”

A big thank you to Hope for appearing on the Mouthy Money podcast. We wish her the best of luck as she returns to life down under in the near future!

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Things I’ve learned about money in other countries

Argentina

I lived in Argentina on and off for two years when I was younger. Inflation is a way of life there, as is using black market methods to obtain and exchange cash.

Because so many in Argentina struggle to make ends meet, it has a very strong ‘make do and mend’ culture. Argentinians also have a real culture of sharing and shared experience, be it at the point of a mate gourd or an ‘asado’ (the famous Argentine barbecue).

I learned to value these experiences above material consumption, because things are ephemeral, but memories last forever.

South Africa

South Africa used to be a nation with a stronger currency, but today that is rather the reverse (although by no means Argentine levels).

But South Africans live in a country of such rich abundance, through the food they eat, the wine they drink and the stunning landscapes they inhabit, that they treasure what they have.

In the UK we have a penchant for the different. I am reminded of the old joke about being British:

“Being British is about driving in a German car to an Irish pub for a Belgian beer, then travelling home, grabbing an Indian curry or a Turkish kebab on the way, to sit on Swedish furniture & watch American shows on a Japanese TV. And the most British thing of all? Suspicion of anything foreign.”

South Africans also show remarkable resilience in the face of trouble. They have been plagued by years of lacking government services, chiefly in the form of rolling blackouts thanks to their state energy provider.

My experience of it is Saffers show resilience, humour and ingenuity in the face of these challenges, something we could all learn from as the world gets a little harder to live in.

What the UK gets right

Hope had one thing to say for what the UK gets right, that I quite agree with her on. We are really good at innovation – particularly when it comes to things like ‘Fintech’ (financial technology).

Apps and banking services such as Monzo, Revolut or Starling have been transformational in the way we manage our money (and have forced major banks to catch up fast). These technologies have been exported around the world and we far outstrip even countries such as the US for user experience and service levels.

One hopes over the next few years we continue to encourage and anticipate trends and innovations, and not look to apply pressure where it isn’t needed.

I’m curious to know what experiences with money you may have had in other countries, as a Brit or otherwise. Do send me an email at edmund.greaves@mouthymoney.co.uk, or leave a comment below.

Photo by Ethan Brooke