Young people need more support on money matters

Sharon Davies

Sharon Davies

Financial education has the ability not just to transform the lives of young people across the UK but the economy more broadly.

It is time to inspire a generation of financially capable young people. 

As we begin to emerge from the economic and social consequences of widespread restrictions and uncertainty, unlocking the capabilities of the next generation of employees and entrepreneurs will play a vital role in ensuring the country is ready to thrive post-pandemic and work towards a better future.

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At present, the level of financially literacy in the UK is not where it should be. A recent survey of 2,000 UK adults showed that almost half of adults cannot pass a basic financial knowledge test around key areas including savings, investments and retirement. 

As young people are growing up in a complex and ever-shifting financial landscape, with pressures and uncertainty around products, methods of investing and ways of earning money, financial education has never before been as crucial, with educators, policymakers, parents and young people awakening to the necessity of ensuring that the next generation feels comfortable discussing money.

The scale of the issues cannot be underestimated, with the Money and Pensions Service revealing that 55 per cent of people do not feel comfortable discussing their financial situation, while 67 per cent of young people do not feel confident planning their financial future.

It is time to reframe the notion that financial education is just about adding up and instead that it has the potential to help young people thrive and open up opportunities for them. This starts by educating children while at primary school when they are forming their mindset with money, shaping their financial capability into young adulthood and beyond.

Despite being on the secondary curriculum, financial education has not, in the main, taught young people the intricacies of how to unlock their financial capabilities and opportunities and it is vital that this is addressed head on.

Young people should be able to understand how to make the most of their money while balancing the world of financial risk and reward. They must be taught the different ways of budgeting, of saving money, and how to analyse and assess the successes of their saving habits, while on the other hand gaining a deep insight into best practice of borrowing and how to leverage personal debt. 

More fundamentally, we need to focus on making sure that young people feel not just in control of their money but are able to use it to the best of their ability, starting with ensuring that young people feel prepared for the workplace and are able to earn and look after their money. 

While it is incredibly important to focus on the capabilities of young people and instil a sense of an enterprising mindset, it is also vital to help them navigate the potential pitfalls that exist in the 21st century. The world is becoming increasingly cashless, with investment opportunities such as stocks and shares and cryptocurrencies available to young people at the push of a button.