It is a mystery to most that despite virtually unanimous support for all young people learning how to bank, budget, save and borrow, it has not happened.
We, members of the Youth Financial Capability Group, believe, with active support, it can.
The need is abundantly clear.
From as young as 16 or 17, young adults make significant financial decisions including choosing whether to go to university and consequently building up to £50,000 of debt.
They are likely to live lives of heightened uncertainty, and risk with their increased personal responsibilities.
Those working in the gig economy will have more flexibility but less security.
Those on low or no pay will have to navigate the fledgling Universal Credit system.
‘Generation rent’ become the victims, not the beneficiaries of 30 years of house price inflation. All are exposed to the UK’s £21bn yearly advertising spend, a voracious gambling industry, peer pressure, and FOMO.
What exactly to do about this is not an unknown. There is more than enough evidence and capability to help plot a course towards financial literacy.
Better financial products and protection are necessary, but education from an early age is the key.
We need to prepare young people to gain the skills, knowledge and motivation to use money constructively and avoid the significant negative consequences of poor financial decisions.
A meaningful financial education is one that is relevant at specific ages, helping to build capability as freedoms and responsibilities increase.
Very young children at primary school do not generally make money choices. Their ‘wants’ and ‘needs’ are met by adults.
But habits build early: as young as seven according to the Money Advice Service (MAS).
This is the perfect time to introduce concepts, get children comfortable talking about money and develop positive behaviours that can become lifelong habits.
At secondary school, children make decisions using their own pocket or birthday money, or even a part-time-job, to act on their ‘wants’.
We can introduce more detailed knowledge and skills in the context of their lives and choices, building capability to prevent future problems and the resilience to cope with the unexpected.
Those 16 and above and approaching adulthood must consider ‘needs’ as well as ‘wants’. More specialised knowledge, practical skills and strategies are introduced to enable and support independent living.
Quality marked resources are freely available.
Thanks to ‘Money Saving Expert’ Martin Lewis, every school received a financial education text book and the YFCG created planning frameworks covering every age group from 3 to 18.
We know that to improve impact, effectively engaging young people is vital.
In group sessions in familiar settings, outside experts or trained-teachers make a big difference and, for young adults, peer-led sessions supported by trained advisers are effective.
In contrast, the evidence is that unsupported resources and technology have limited impact.