Three in five children not taught about money
Fewer than half of children aged seven to 17 are learning about financial education at school, despite it now being part of the national curriculum, according to new research from the Money Advice Service (MAS).
It also found that a third of 16- and 17-year-olds had never put money into a bank account, 39% didn’t have a current account at all, and 59% didn’t know how to read a pay slip.
This is despite 91% of those who do receive personal finance lessons find the courses useful, according to the MAS’ survey of almost 5,000 children published today to kick off the inaugural Financial Capability Week, which aims to help people get to grips with finance. The picture to the left shows Money Saving Expert, Martin Lewis, launching Financial Capability Week.
David Haigh, director of financial capability at the MAS, says: “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 fulfill in helping prepare their children to manage their money in adult life.”
“We need to help parents be better role models”
Outside of classrooms, many children aren’t learning vital money lessons either, as just 61% of parents say they feel confident talking with their children about money, and just one third involve their kids in discussions about the household finances.
Mr Haigh suggests parents’ lack of confidence at managing their own finances could be part of the problem.
He adds: “Parents’ money management may not set the best example. Half 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 of 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.”
The MAS says people who aren’t taught about money in their childhood are poorly prepared to manage their finances when they reach adulthood, potentially leaving them at risk of being targeted by payday lenders when they reach 18 and can sign credit agreements.
MP Suella Fernandes, chair of the All Party Parliamentary Group (APPG) on financial education, says: “These 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.”
To improve personal finance lessons, Ms Fernandes and the financial education APPG has called on the Department for Education to include financial education lessons within teachers’ initial training, and for schools to appoint a financial education “champion” to oversee personal finance lessons at every school.
Why are so few children learning about money?
Since September 2014, financial education has been part of the national curriculum in secondary schools. However, many schools aren’t required to teach it, as private schools and free schools are not bound by the national curriculum.
Additionally, many schools are yet to get to grips with how to teach children about money, and what they need to know by the time they reach school, according to Adrian Lyons, a senior inspector at Ofsted.
He says: “Our evidence is that schools have not established comprehensive programmes of personal finance education that clearly identify the full range of learning outcomes pupils are expected to achieve by the age of 16.
“Teachers delivering financial education often lack training and in turn lack confidence in teaching topics, restricting opportunities for discussion and debate. The Ofsted inspection framework looks for young people to be well-prepared for life in modern Britain. Part of this is ensuring that young people leave school well-informed and well-prepared to function as consumers, employees, potential employers, and to contribute as citizens to the complex and dynamic economic, business and financial environment in which they live.”
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.