'Labour's 'real-world' maths is step in right direction for financial education'

Last week, we saw Labour announce its policy to introduce "real-world" maths in primary schools. While it remains light on detail, at face-value it sounds like a sensible step towards bridging the gap between academic learning and practical life applications.

Teaching primary school children about financial education might seem too young but many perceptions of the world and foundational skills are learnt at a young age, and money is such a big part of our lives it seems natural that it would form a part of their learning.

In fact, research has shown that our financial attitudes are shaped early on in life, around the age of seven.

These types of budgeting and other financial skills can help to set children on a path to financial independence and resilience and ultimately help to address a serious lack of financial education in the UK.

According to the Financial Conduct Authority, in May 2022, 12.9mn UK adults had low financial resilience, which equates to one in four (24 per cent) of all UK adults.

It is more important than ever to ensure students can judge and interpret the vast array of online information effectively.

Someone might be classified as having low financial capability because they are in financial difficulty or might quickly find themselves in difficulty if they suffer a financial shock because they have little to no savings or are heavily burdened by their domestic bills or credit commitments, for example.

And recent research from charity MyBnk and comparison website Compare the Market found only two-fifths of young adults are financially literate, and only 61 per cent remember receiving financial education in school. 

Labour should look to the great work being done by many financial education charities, including MyBnk, to support teachers to deliver best practice when it comes to financial education.

This kind of support for schools is particularly crucial for financial education, as it is a specialist subject that has long been absent from mainstream education.

It is important to ensure teachers are suitably equipped through investment in teacher training and learning resources. Enabling teachers to partner with external organisations who already work in this space is a great way to enable this.

Labour’s suggested pivot towards real-world applications, like bank interest rates, Isas, household budgeting and understanding sports league tables, is sensible but it needs to be taught in an engaging way.

It is not just about the numbers; it is about the behavioural aspects of making informed decisions that benefit your financial health in the long run.

Embedding these lessons early on, gradually evolving the complexity as children grow, ensures that future generations are not just numerate but also financially savvy.

Prime Minister Rishi Sunak’s desire to improve maths education is also commendable, but it is crucial to ensure that any revamped maths curriculum includes practical skills relevant to work and life, specifically financial education.

The world of work has undergone a dramatic transformation in the past 20 to 30 years, making it essential for children to acquire the necessary skills to succeed after completing their education, and while complex maths skills might be useful for some, practical money skills are crucial for all.

The prime minister’s plan to mandate maths education until the age of 18 can only be effective if it equips students with applicable skills for various aspects of their lives, including personal finance management.

While the addition of any extra financial education into school is good, a ‘real-world’ maths policy is much more likely to influence money behaviour and in turn help to treat the epidemic of financial illiteracy in this country than the ambition to make maths compulsory up to age 18.

By our late teens many of our habits are already formed and its then difficult to break them.

When considering the challenges facing upcoming generations, we must also recognise that we live in age where there has been a huge rise in social media being used as a platform for financial advice and insight.

This means it is more important than ever to ensure students can judge and interpret the vast array of online information effectively.

Part of this financial education should focus on empowering students to use the information available online positively and responsibly, enabling them to discern between credible sources and misleading advice.

Whichever party is in power in the coming years, we have a golden opportunity to equip young people with practical financial skills, address the prevalent issue of financial incapability and foster a generation of individuals better prepared to navigate the complexities of today's economic landscape.

Ultimately, such reforms could contribute significantly to the nation's long-term economic growth and stability.

Steven Levin is chief executive of Quilter