Financial education is not enough for young people

What does this graph show?
You’ve heard of Mom and Dad’s Bank – but in many cases it has an educational ramification.

According to the London Institute of Banking and Finance (LIBF) Young Person’s Money Index report, nearly three-quarters of young people in the UK say they get most of their financial knowledge from their parents and other family members.

Although financial literacy has been part of the national curriculum since 2014, only 8% of young people said they learned the most about financial skills in school, and 17% said they were self-taught.

The LIBF finds this worrying. Not every parent will be able to educate their child about money matters and relying on parental advice or being self-taught on the internet could potentially give young people bad advice. No wonder 69% of students surveyed said they were worried about money.

Do young people want to learn more about money at school?
Yes. The LIBF study found that the number of students who wanted to receive more financial education at school was very high – 82%. They also said the course offering was spotty – 18% of respondents said they had received personal finance training in the past month, but 15% said it was more than a year ago.

Financial literacy falls under citizenship education for schools run by local authorities – It does not currently need to be a separate lesson and is usually integrated with other subjects. Academies and independent schools are under no obligation to teach it.

However, the Young Persons’ Money Index found that 64% of young people said they had accessed financial education in the past year, up from 29% in 2015, a year after the program was introduced.

What the lessons consist of is a separate question. A previous report by The Money Charity found that the financial literacy taught in schools was “ineffective”. The all-party parliamentary caucus on financial education found that only 17% of secondary school teachers had received training or advice on how to teach it.

What would the students like to be taught?
Predictably, learning the student loan system was a priority. The majority (66%) of students surveyed intended to take out a student loan, but more than 50% of 15-16 year olds said they did not understand how the student loan system actually worked.

The LIBF found that 87% of young people want to know more about how specific financial products work, including credit cards, savings accounts, mortgages and pensions. Just under 80% said they had received no information about how the tax system works, 77% wanted to learn how to budget, and 73% wanted to know more about debt management.

A total of 60% of young people said they wanted to learn about money as a separate subject, rather than integrating it into other lessons.

How should schools teach financial education?
LIBF advocates for financial education to be taught as a separate subject with regular class time.

“Many children have access to financial education, but it is erratic and inconsistent,” said LIBF spokesperson Heather Tilston. “Financial education should be included in Ofsted’s education inspection framework to alert teachers to the importance it should be given and the time it deserves. ”

Martin Lewis, founder of MoneySavingExpert.com, personally funded a financial education manual called Your money matters aimed at 15-16 year olds, which has been sent to over 3,000 state-funded secondary schools in England.

He previously said the campaign to make financial education part of the school curriculum was a ‘pyrrhic victory’ because the government didn’t devote any resources to teaching it and many schools still struggled to do it well. .

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