For adviser Bev Stoves, it all started when her sons were much younger and she asked them how much they thought a house, car, the council tax or the water rates cost and they did not know.
Her sons are now aged 17 and 12 and have a better idea about how much household and financial products cost.
Ms Stoves, managing director at Investment Sense, says: “I only ever talk about finances for a few minutes here and there, but my boys understand the concept of mortgages, tax, savings, inflation, investment risk and life insurance. My eldest son is doing economics at A-Level, and he recently came home and demanded to know if I knew about the 40 per cent tax rate. He was incensed.”
This is why she is so passionate about young people receiving financial education. It has also now spurred her on to volunteer as a trainer for the Personal Finance Society Education Champions initiative, which is to be launched in September to address the problem of financial illiteracy in young people.
It is also in response to the 2017 FCA Financial Lives survey, which said a lack of understanding about budgeting, saving and investing had contributed to 4.1m people failing to pay bills or credit commitments. Some 3.5m are also borrowing from friends and family to make ends meet, while just over a third (35 per cent) of those aged 45-54 have prepared for retirement.
As the Education Champions scheme is rolled out across the country, advisers will volunteer to work in secondary schools and further education colleges.
In the three weeks since the scheme was launched, 350 advisers have signed up to volunteer as trainers.
The PFS is launching a financial education initiative in September
It is hoped it might build more financial awareness among school children
It could help attract financial planners to the industry in the future
Using the PFS’s existing Discover Fortunes schools initiative, with help from advisers young people will be put into teams and role play as financial planners, competing to come up with the best advice in different scenarios.
The sessions will take place as standalone classes, typically during a free period.
Over a 90-minute period the teams plan five different client portfolios. They do this by first watching animations where the client characters introduce themselves. Teams then review further client information and assess their client’s risk profile before agreeing on the portfolio plan.
Keith Richards, chief executive at PFS, says: “Originally launched in 2012, members of the PFS team have delivered it more than 150 times at schools, colleges and universities across the UK, with more than 80 per cent of students expressing an interest in working in the financial planning sector after playing the game.
“Now that the scheme has been rolled out to our 37,000 members, we would like to see its reach extended right across the country’s network of secondary schools and colleges of further education.”
More needs to be done