This week is Talk Money Week – an annual event organised as part of the Financial Capability Strategy for the UK which aims to get more people talking about money.
Financial capability and confidence among UK adults is generally low – lower than most other countries.
That affects how consumers engage with the sector and the outcomes they get with their money.
As an industry we’ve had more than our share of mis-selling scandals, creating very large dents in consumer trust in the sector as a whole.
As educators, the London Institute of Banking and Finance (LIBF) believe in the power of education in helping to create more financially confident and competent consumers. Getting financial education onto the national curriculum in secondary schools in 2014 was a great starting point for helping to move the dial in terms of giving younger generations stronger foundations.
In our annual Young Persons’ Money Index we track the delivery of financial education and its impact.
We’ve found that more young people than ever before say they worry about money – 71 per cent in total (up from 62 per cent in 2017), increasing to 81 per cent in the 17 to 18 age group. And most young people (83 per cent) say they want to learn more about money in school.
Very few schools are teaching standalone personal finance qualifications – it’s being squeezed into other subjects. These results suggest that, so far, just including financial education in the curriculum is not having the impact we all hoped for.
In our view, young people need help understanding the practicalities of managing money – day-to-day and for the long term – and teachers need support to deliver that.
We need to look at what’s being taught, how that’s being delivered and make sure there’s enough time on the curriculum. Otherwise we risk another generation growing up without the essential knowledge they need to manage money well.
We’re calling for clearer guidance to be given to teachers about what financial education should cover and for financial education to be allocated a mandatory number of hours – at least an hour a week.
LIBF is a member of the Youth Financial Capability Group which has developed Financial Education Planning frameworks to support teachers, and which is being sent to all schools.
And we’re doing what we can – we provide specialist personal finance qualifications which schools can choose to offer, which we know really does shift the dial for those students lucky enough to get access to them. We’re also reaching out into the communities – in particular to vulnerable groups – to help improve financial capability among adults.
But it’s not enough. Changing financial capability across the UK will take time and commitment at all levels – in the industry, in government, in education and at home.