Financial education deserves its space on the curriculum
By Emily Church
Given the rollercoaster news agenda of late with Scottish political inquiries, handbag fights over vaccines and the - teasingly close, but still so far away - date we’re allowed to have someone over for a barbecue, you might be forgiven for overlooking the fact we are currently basking in the glow of Global Money Week 2021.
Global Money Week’s theme for this year is teaching young people all about money, a worthy cause indeed which is clearly badly needed if recent statistics are anything to go by. Figures reported in the FT last week from financial literacy charity MyBnk estimate more than 20 million UK citizens have no idea how to manage their money; 11.5 million have no savings over £100 and nearly 9 million are currently in ‘serious debt.’ Women are twice as likely to be living in poverty than men, according to the Young Women’s Trust.
Compounding these troubling numbers, the FCA this week launched their report into the behaviour and beliefs of self-directed investors, with a particular focus on younger and/or inexperienced demographics. The report found that only 41% of inexperienced investors (with less than 3 years of experience) believed that losing some of the money they invested was a ‘genuine risk.’ This was despite almost two thirds reporting that a significant investment loss would have a ‘fundamental impact on their current or future lifestyle.’
Whether we are talking about bank accounts, insurance and mortgages, or investment accounts and pensions, it is dismally clear that financial education in the UK has been neglected for far too long. In a rather grim coincidence, Global Money Week falls on the same week in the UK as Debt Awareness Week – the fact that this debt awareness campaign exists is proof, if any was needed, that the status quo simply isn’t good enough.
Of course, it doesn’t help that discussing money matters in the UK is still considered taboo. Having worked in the personal finance space for my entire career, financial topics are still considered ‘niche’ by many media outlets, relegated to a thumbnail stuck in the corner of a website. For many Brits, their entire financial education comes from their parents, regardless of how qualified those parents may or may not be. The reality is that we all would benefit hugely from a broader, more visible discourse on money matters.
Research conducted by debt management firm Lowell found that 69% of Brits do not discuss their debts with others, and over half cite embarrassment as the main reason for keeping quiet. This ‘don’t-ask, don’t-tell’ attitude towards personal finance helps nobody except the small but significant minority of bad-faith actors who might seek to exploit a customer’s lack of knowledge.
And make no mistake, it is the inexperienced customer who will bear the (sometimes lifelong) consequences of any poor financial advice they follow which begs the question: why do we first help to create debtors only to then punish them? Seeing financial troubles fared by my own friends and family has left me in no doubt that if we cannot control our finances, we cannot control our lives. When we equip young people with the tools they need to manage their own affairs, the entire country benefits. Its time to put personal finance on the curriculum, where it belongs.