Financial education in schools: the damaging effect revealed
How much of what you were taught at school do you use in your everyday life?
From Pythagoras’ theorem to photosynthesis, it’s safe to say that some of what we learnt has had little impact on how we manage in the real world. Particularly how we manage financially.
40% of Brits recently pinpointed a lack of education about pensions at school as the reason why they didn’t take their pension seriously when they were young enough to do something about it1.
In fact, those currently fresh out of education are the least likely to be able to correctly define what a pension is and were none the wiser when it came to knowing what age they can take money from their pension. It’s not just pensions Brits wish they had learnt more about at school2.
Other financial skills include:
In fact, 68%2 of Brits think being taught these skills at school would have improved their financial position later in life. So, despite the government adding financial education to the curriculum in 2014, why are school leavers still not clued up when it comes to understanding the basic financial knowledge needed to navigate the ‘real world’?
Sue, a secondary school maths teacher from Kent said:
“The current GCSE mathematics curriculum contains no financial content. Students may need to work out what the best buy would be or the VAT on a sofa, but at no point are schools directed to teach anything specifically relating to finances. There is also no benefit to schools in teaching their students basic financial knowledge; it will not be reflected in the school’s success statistics which parents and OFSTED are so keen to know and scrutinize.”
A survey by the Money Advice Service3 revealed that 88% of teachers don’t have the training or specific qualifications needed to teach financial education. Teachers themselves stated that the top barriers to delivering more financial education in school are lack of time in timetables, lack of flexibility in the curriculum, the cost of delivery and fear of not having the necessary skills or knowledge.
Maths teacher Sue also revealed that:
“In the current economic climate teachers are very aware of the importance of financial education, but also of their lack of training. Educators often only have knowledge based on their life experiences and may not feel confident to instil financial expertise on students.”
Those in education have money on their mind too with 83% of students wanting to learn more about money in school and 15% worrying about money on a daily basis4.
Commenting on the findings, Jamie Smith-Thompson, Managing Director of Portafina, said:
“The issue of financial education in schools needs addressing urgently. Yet making it a part of the curriculum looks like an empty gesture if teachers are not given the time and tools they need. The government has an obligation to equip the next generation with the right financial skills to navigate life. An outcome that looks very unlikely while the government’s focus is fixed on the continuing mess that is Brexit.”
The knock-on effect
While financial education in schools is still lacking formalisation and consistency, children continue to reach adulthood unprepared for what financial obstacles could lie ahead. Particularly the reality of what they could need to live on for a comfortable retirement. With four in ten Brits doubting they will have enough money to live on in old age5 and the rising State Pension age, understanding basic money management and the benefits of saving into a pension from a young age are more important than ever.
2 Statistics taken from a survey of 2,002 employed UK adults, which included 1,542 parents in April 2019
4 Young Persons’ Money Index 2018: Students aged 15-18