Help kids to learn the value of money
It was a great step forward when personal finance was put on the National Curriculum in September 2014.
On that date, it became a statutory requirement for maintained schools in England to teach financial education in mathematics and Citizenship, making it part of the curriculum across the UK.
Organisations such as Young Enterprise (the home of Pfeg, the Personal Finance Education Group) are working hard today to support teachers with money lessons and raise awareness of the subject in schools.
But our campaign is a call for Moneywise readers to take action too, and to spread the word about resources and best practice. Together we can make the next generation better equipped to deal with the everyday challenges of managing money.
As a parent of primary school age children, I expect to help with reading at home. But I also know that one short session a week with the teaching assistant (or if my child is lucky, the teacher) will not be enough to move them on from picture books to reading ‘chapter’ books independently at age seven. And I know that even if my children receive money lessons at school, they need to practise those lessons at home.
Sadly, financial education isn’t working well enough yet. In November 2016, the Financial Services Compensation Scheme (FSCS) published research revealing that millions of young children have no experience with money.
The FSCS found that more than a quarter of children under 12 in the UK have no experience with money, as 27% of parents do not give their children pocket money or financial rewards for carrying out household chores.
Only 50% of parents surveyed give regular pocket money to their child, although 65% offer financial incentives as a reward for helping around the home, and 43% do both.
Although 79% of parents agree that experience in dealing with money helps children to learn and appreciate its value, 54% of parents worry that their child would simply spend the money on chocolates and sweets, and 31% admit they tend to influence their child’s purchases.
Why does financial education matter? Martin Upton, director of the True Potential Centre for the Public Understanding of Finance, says: “The issue is that, with many financial services products being essential, too many adults have insufficient understanding about things such as debt, assets and risk to make appropriate financial decisions with confidence and also don’t know where or when to seek reliable advice.
“Citizens Advice Bureaux (CAB) statistics disclose that about eight million people have problem debt and that 40% of adults have less than £300 in savings.
"Their concern is exacerbated by the fact that an ever increasing number of adults have never experienced an interest rate rise – the Bank of England bank rate has been at 0.5% for over seven years – and, when rates do rise, many may experience severe financial shock. According to CAB, the impact of debt can lead to both mental and physical health problems as well as stress on relationships. It’s essential to have better financial education.”
What can you do?
Is your child or grandchild’s school providing financial education? It is not currently mandatory for academies to teach financial education despite the subject being on the national curriculum. So if your child attends an academy, find out if this vital part of education is missing. In November 2016, research from the Money Advice Service found three in five children are not taught about money.
We need to be scrutinising how money lessons are taught. And not just for the content. Do our children and grandchildren fi nd the lessons fun and engaging? We need to be writing to head teachers asking what will be taught – and how, and when. The subject also needs to be made more accessible and appealing to young people through the use of technology, games and even apps.
Ask your child if they have learnt anything about money at school. And listen to what they have to say.
Talk about your own experiences with money. Email email@example.com. We are compiling a list of important money lessons that you can teach a child and would welcome your input.
Think about volunteering. If you work in financial services, ask your company put together a programme of volunteers to go into schools to run workshops on managing money?
Nominate a teacher that you know is making money lessons fun for the Moneywise Personal Finance Teacher of the Year awards 2017.
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The Financial Services Compensation Scheme is the compensation fund of last resort for customers of authorised financial services firms. If a firm becomes insolvent or ceases trading, the FSCS may be able to pay compensation to its customers. Limits apply to how much compensation the FSCS is able to pay, and those limits vary between different types of financial products. However, to qualify for compensation, the firm you were dealing with must be authorised by the Financial Services Authority (FSA).