The evidence for a need for greater financial awareness is overwhelming. In 1995, the National Foundation for Educational Research was commissioned by NatWest to undertake a survey of adult learning needs related to financial literacy. This revealed that only a third of the population understood the meaning of "gross" and "net" interest, and that 40 per cent of young workers and 28 per cent of the general population did not realise that 10 per cent of pounds 300 is more than pounds 25.
Recently, the Association of Unit Trusts and Investment Funds (Autif), the unit trust trade body, published the latest findings from the Financial Awareness and Consumer Education Tracking Study.
Each month a sample of 1,000 people are asked 14 questions covering a wide range of personal finance topics. They are the same questions, and will be changed only when circumstances dictate. To preserve the integrity of the survey, the questions cannot be revealed. The study revealed that there had been no improvement in the knowledge of personal finance over the previous 12 months.
Those surveyed increasingly recognise that an understanding of personal finance is of fundamental importance to their independence. Many bemoan the fact that they were never taught anything about it at school. Autif therefore found it surprising to discover that 72 per cent of the population either believes that personal finance is now a core subject in the National Curriculum for secondary education, or does not know whether it is included.
Thanks to the Personal Finance Education Group (PFEG), progress is being made. This consortium of financial service industry representatives, regulators, government officials, the Consumers Association and educationists believes that greater attention to financial matters in the National Curriculum is the surest way to help young people make independent, informed decisions about their finances and long-term security.
One early finding was that despite companies in the financial sector preparing educational material and forwarding it to schools, it was not being used. The PFEG has therefore produced a series of interlinking initiatives to help with teaching personal finance in schools.
The brochure Learning Framework sets out learning objectives for pupils aged five to 16. These include understanding the concept of money, money management, and making financial decisions. It suggests classroom activities linked into all subjects in the current National Curriculum.
This is supplemented by Opportunities in the Curriculum, which goes through the National Curriculum identifying points where personal finance topics are relevant to subjects such as maths, English, history and geography. The Directory of Resources not only lists the sponsored resource material available, but also indicates how these fit into the Learning Framework.
Teachers are, not unnaturally, concerned about taking advantage of the free material supplied by financial services companies. In the past what should be generic information has bordered on advertising material. The PFEG has therefore issued guidelines for sponsored material.
The Learning Framework is currently being piloted in schools in Manchester, Kent and central London. Some 24 schools are involved, with different backgrounds: primary and secondary; urban and rural; large and small; single-sex and co-educational; and maintained and independent.
A range of curriculum approaches is being tested to validate the Learning Framework in a number of contexts. The pilot is being carefully monitored by the PFEG.This is a step in the right direction. However, a fundamental problem remains. Although PFEG research reveals that 77 per cent of secondary school teachers recognise the importance of personal finance education, only 10 per cent feel confident to teach it. A further barrier is seen to be "lack of time" because of the breadth of the National Curriculum.
So what can parents do to ensure that their children are financially aware? Victoria Nye, a founder member of the PFEG, has this advice: "Parents should ask schools to include reference to personal finance when developing basic skills such as numeracy, literacy and communications. Also, during the school holidays parents can help their children become canny consumers. Everyday activities such as shopping, cooking and DIY tasks can all be low-key lessons in personal finance."
Teachers may obtain copies of the brochures mentioned above from: Roshan Bailey, Project Manager, PFEG, c/o ABI, 51 Gresham Street, London, EC2V 7HQ, (0171-216 7550, or e-mail: roshan.baileyat dial.pipex.com