Doubts have been raised about the effectiveness of financial education taught in schools.
At The True Potential Centre for the Public Understanding of Finance conference last week, Jonquil Lowe, lecturer in personal finance at the Open University Business School, said financial education works best when it is “salient and relevant”.
But she was sceptical about teaching financial education to young children and said teaching finance in schools had “little impact”.
Instead, she noted, “the workplace is shown to be an effective place for financial education interventions”.
Financial education became a mandatory part of the secondary school curriculum in September 2014, although there is currently no assessment in schools.
Kirsty Bowman-Vaughan, senior policy manager at the Money Advice Service, acknowledged delivery of this type of education in the UK was “patchy”.
But she believed it was important to teach financial education at school age.
Jeanette Makings, head of financial education services at Close Brothers Asset Management, also “took issue with saying financial education doesn’t work” and argued they need to look at what aspects of it do not work.
In her presentation to delegates at the conference hosted by the Open University Business School, she pointed out 14 per cent of 18-34 year olds said they would save more if they could budget and suggested financial education was about “equipping people to make better decisions”.
Martin Upton, director of the True Potential Centre for the Public Understanding of Finance at The Open University Business School admitted the UK has only belatedly woken up to the importance of providing financial education.
In a press release, he commented: “Improved financial literacy enables informed and responsible financial decisions to be made on routine matters such as debt, savings and insurance as well as for important life-planning decisions.”
Mick McAteer, co-director at The Financial Inclusion Centre, was also a speaker at the conference.
He revealed in the 1990s, it took low to medium income households an average of three years to save for a first-time buyer deposit, while today it takes the same households 20 years.
He also claimed the UK was experiencing the biggest squeeze in earnings since the Napoleonic times.