Monday 14 November 2016
Less than half of young people aged seven to 17 are receiving financial education at school.
New findings by the Money Advice Service, released today at the launch of Financial Capability Week 2016, shows that just 4 in 10 young people in the UK say they’ve received financial education, which is designed to teach children how to handle their finances confidently and is currently part of the curriculum across the UK.
This, despite the fact that an overwhelming 90% who’d received financial education lessons said they found them useful. In addition, the survey findings showed that only 7% of children surveyed said they’d taken the time to speak to their teacher about money.
There is an issue outside of the classroom too, with only 61% of parents admitting that they feel confident talking to their children about money and with only one-third involving their children in discussions about their household finances.
When young people don’t receive financial education, it can mean that they’re poorly prepared to manage their own money as they approach adulthood. Today’s research clearly demonstrates this – among 16 – 17 year olds, 32% said they didn’t have experience of putting money into a bank account, 39% said they didn’t have a current account at all and a shocking 59% couldn’t read a pay slip.
The first ever Financial Capability Week, beginning today (14 Nov), is designed to raise awareness of the importance of financial capability – that is, people’s ability to manage their money well, both day-to-day and through significant life events, such as losing their job, having a child or suffering a bereavement.
Suella Fernandes MP, Chair of the All Party Parliamentary Group on Financial Education, said: “These research findings clearly show that there is plenty more to do to improve the delivery of financial education, which remains inconsistent and varying in effectiveness. It’s essential that we provide appropriate training and resources for teachers to enable them to deliver these crucial lessons.
“A collaborative approach is absolutely vital in tackling this issue – we must encourage educators, policy makers and other organisations to work together to deliver effective financial education to our children. The All Party Parliamentary Group on Financial Education for Young People has recommended the Department for Education embed financial education within the new Initial Teacher Training framework. In order to ensure high quality provision schools should appoint a financial education ‘champion’, ideally a member of the Senior Leadership Team, to coordinate and promote learning and training in this area.”
David Haigh, Director of Financial Capability at the Money Advice Service, said “The fact that only 40% of pupils reported receiving financial education show that gaps exist in the provision of financial education. Given that so few children actually speak to their teachers about money matters, there’s a clear role for parents to fulfil in helping prepare their children to manage their money in adult life. However, we know that only one-third of parents talk to their children about household finances.
“In addition, parents’ money management may not set the best example. Half (50%) do not save regularly, 44% say they don’t feel confident managing their money and 68% say they find keeping up with their credit commitments and bills a burden.
“In order to find a lasting solution to the problem of the UK’s stubbornly low levels financial capability, we need to help parents be better role models, build their confidence in speaking to their children about these matters and support schools to deliver effective financial education.”
Elona Gega, a student from London who received financial education through a scheme provided by financial education charity MyBnk, benefitted from receiving financial education. She said: “Money is real to me now! Learning how to manage it and avoid bad debt has improved my confidence, cut my spending and opened up new opportunities. I have just started living independently and want to go to university, it’s really important I know how to take care of my finances. Today, I feel like I’m in control of my money rather than it being in control of me.”
Russell Winnard. Head of Educator Facing Programme and Services at Young Enterprise, said: “Collaboration between organisations is absolutely vital to ensure that young people receive high quality financial education. By sharing information on effective approaches, the way in which financial education is delivered can change for the better. The Financial Education Quality Mark is an accreditation awarded to teaching resources that are accurate, engaging and of the highest standard, to allow educators to identify the best financial education materials.
“Today, we launch a revised version of the Quality Mark – the new version will support providers in evaluating how effective their resources are and share their findings with others. Doing so provides the opportunity to create the most effective, consistent financial education resources, thereby improving the standard of financial education for children across the UK.”
NOTES TO EDITORS
For media enquiries please contact:
Joe Cockerline or Joanna Brady at the Money Advice Service. Email email@example.com or call 020 7943 0593 during office hours or 07767 438 670 outside of office hours.
A two page document giving more detail on these findings is available to download here.
The figures below from the London Institute of Banking and Finance were released as part of their Young Person’s Money Index and support the findings presented above.
- The majority of students (58%) currently do not receive any form of financial education in school or college;
- Older students (17-18) are significantly less likely to receive financial education than younger students (15-16), at a time when they will soon be required to make independent financial decisions about going to university or starting their careers;
- 80% of students name their parents or family as their prime source of financial understanding;
- 61% say they have money worries;
- 7% of teenagers view teachers as a source of financial education; 2% talk to their teachers about money
Alison Pask, Managing Director of Financial Capability and Outreach at the London Institute of Banking and Finance, said:
“There is no one way to deliver financial education, which is why it is vital to ensure that young people have access to financial education, co-ordinated across various channels. There are clear opportunities for the finance and banking industries to play a central role in this. Our research showed that only 1% of students cited their bank as their primary source for financial information, while an additional 1% said their bank was who they talk to most about money. Though financial education is part of the curriculum, the industry should avoid thinking that this is “job done”. Banks and financial institutions have a central role to play, alongside educators and parents, in ensuring that young people are financially capable and that their future customers are informed and engaged when it comes to managing their money.”
Mike Ellicock, Chief Executive of National Numeracy, said:
“We are delighted to support Financial Capability Week and believe that financial education - underpinned by good solid number understanding and practical numeracy skills - is essential for all young people. We know from recent OECD research that adults in the UK lag seriously behind in their financial knowledge and that too many can’t work out even simple interest. This has to change.”
Guy Rigden, CEO of MyBnk said:
““These findings suggest an alarming number of young people are not getting the financial education they need at home or in school. However, this study also reveals the huge potential of effectively engaging them with money. MyBnk and our sector are embarking on a range of studies with the Money Advice Service to test what works on the frontline, including direct delivery, where we have helped over 160,000 young people using trained experts.”
About Financial Capability Week
Financial Capability Week is a themed week raising awareness of the importance of financial capability, what it means and the organisations involved in making a change. The purpose of the week will be to raise awareness of the importance of financial capability and relevant initiatives by organisations working in this area, highlighting key issues to policy makers and the media. It takes place from 14 - 20 November 2016. There are hundreds of organisations in the UK who are involved in tackling low financial capability. They know the challenge we face in making sure people are prepared for financial shocks and able to achieve their financial goals. But we need to amplify these messages so that we can achieve the large-scale change needed.
About Young Enterprise’s Quality Mark
The Financial Education Quality Mark is an accreditation system for financial education resources that have been created for use with children and young people. It is awarded to resources that support high quality teaching and learning about money.
The Financial Education Quality Mark gives those delivering financial education confidence that the materials they are using contain accurate and up-to-date information, are of the highest educational value, and are engaging and relevant for young people. Through evaluation, supported by the Money Advice Service the Financial Education Quality Mark service also helps resource producers to understand the impact of their resource.
Alongside this formal recognition of financial education as an important life skill, there is a clear need for quality-assured financial education resources that effectively support teaching and learning about money across a range of contexts including, the classroom, non-mainstream educational settings, informal and formal groups for young people, and within the home. Evaluation supported through the Financial Education Quality Mark is vital in contributing to the evidence base for financial education.