'10 years on: Financial education has remained static'

When it was introduced there was the option for academies and free schools opting out of teaching it, and while some have introduced it, it does feel as though most have not.

Recent research by Foresters Friendly Society found that only 38.5 per cent of Gen Z respondents (those aged 14 to 25) demonstrated knowledge of the annual Isa contribution limits – although this surpassed millennials (aged 26 to 35) where only one in three knew the correct amount.

When it came to an understanding of inflation, millennials and Gen Z were evenly divided with 48 per cent and 46 per cent, respectively.

However, an intriguing revelation was that one-third of Gen Z respondents admitted they didn't know the answer instead of guessing, while double the number of millennials answered this question incorrectly rather than saying they didn't know the answer.

These figures are not only surprising but also worrying as one would assume 10 years on from the introduction of financial education, there would have been a more positive impact on young people’s understanding of money.

But is it because we’ve lagged at teaching it in schools or because it is being taught too late?

This aligns with an evidence session last week where a number of advocates called on the government to prioritise financial education in primary schools from a younger age, stating it is currently in a "perilous state".

One of the individuals on the panel, Louise Hill, chief executive officer and co-founder of Go Henry – the prepaid debit card and financial education app designed to teach kids and teens how to be smart with money – gave evidence to the education select committee’s inquiry into strengthening financial education.

I do wonder why we haven’t progressed, but what's even crazier to me is why we are waiting till secondary school to teach this.

Quoting some research, she said 60 per cent of children do not remember having received financial education, and when you look at how many children understand interest rates it's sub-40 per cent. 

In addition to this, the Centre for Social Justice called for an “urgent rethink” of the way we approach financial education. 

The think tank carried out research in 2022 that found two-thirds of young adults who experienced financial difficulties believe better financial education could have helped them. 

Looking at where we are today in terms of education provision and reading statistics such as these, it is worrying to see that so many leave school feeling like they don’t know enough. 

It is a wild thought to me as to how we can remain static 10 years later, on a topic that is so very important.

I do wonder why we haven’t progressed, but what's even crazier to me is why we are waiting till secondary school to teach this.

Having these habits set from a young age could be the difference between someone potentially being scammed and someone having the right questions to ask.

Anyone with a passion to teach financial education at a younger age has probably heard this quoted a million times but for those who haven’t, here it is.

Behaviour experts from Cambridge reviewed previous studies to determine how children learn in general, and in particular, how they learn about money.

They concluded that money habits, including the ability to plan ahead, are usually formulated in early childhood by the age of seven. 

Now of course, it doesn’t mean that if that window is missed then children are sentenced to a life of debt and bad money habits, as this can always be influenced by proper education.

But knowing this information, it seems the most straightforward solution would be to start introducing the concept from a young age. 

Financial skills are invaluable and financial literacy is a lifelong skill. 

The impact of having it weaved into conversations or life from a young age is priceless. 

Sonia Rach is deputy news editor of FT Adviser and author of recently published Loose Change: Tina Learns to Save