Children left in the dark about saving
The winners of a national competition for teenage investors are succeeding where parents and teachers fail, writes Sam Dunn
Sunday 09 May 2004
In just three months, they managed to turn £100,000 into £155,000. Yet these investment gurus don't earn six-figure City salaries. In fact, they have an average age of 17.
Four teenagers from Plymouth College, an independent school in Devon, have trounced the FTSE All Share stock market index with their phantom basket of shares to win the 2004 ProShare Student Investor Portfolio challenge.
Their performance puts many City fund managers to shame. But while the students' financial savvy might appear to promise well for the future of the UK's personal finance industry, they are the exception, not the norm.
According to the Nationwide building society, more than half of 11- to 16-year-olds say that neither their parents nor their teachers talk to them about saving money. The Halifax also found that 51 per cent of parents do not encourage their children to save anything at all.
"It's a huge challenge to work with the [diverse financial] backgrounds children bring with them to school," admits Vola Parker, business manager at the Personal Finance Education Group (Pfeg), an educational charity sponsored by the Government, the financial industry and its watchdog, the Financial Services Authority (FSA).
Ray Milne, the Halifax's head of financial services, fears attitudes in the home could scupper the Government's plans for child trust funds (CTFs). For its part, the Treasury hopes that the £250 to be given to children at birth (from April next year) and subsequent top-ups will help new generations of Britons to grasp the mechanics of saving.
But Mr Milne says parents who don't make the most of CTFs could waste this oppor-tunity. "As parents, we have got to instill in our children the importance of saving from as early an age as possible," he warns.
Children struggling to save have every right to complain about a lack of example from their elders. The Association of British Insurers estimates that there is a £27bn gap between what we should be saving for an adequate retirement and what we actually put aside. Add to that the UK's eye-watering levels of personal debt, and millions of homeowners on uncompetitive mortgage rates, and you have an adult population failing to master its own finances - let alone those of its children.
Meanwhile, personal finance education continues to languish as a non-compulsory part of the national curriculum. And teachers wrestling with their own finances often find the subject especially difficult to teach.
"Some teachers have a problem with confidence," says Tara Golshan, head of education at ProShare, which runs the national Student Investor Portfolio challenge, in which nearly 1,000 schools took part this year. "There's a lost generation of parents, and teachers, who know very little about finance."
The Government is working with the FSA to tackle the problem: a financial-capability steering group was set up last year. One possibility being explored is a levy on all financial bodies to "educate" their customers, but details remain hazy.
The steering group will shortly publish a strategy document that will look at ways of funding personal finance education in schools. But, ironically, the two charities closely concerned with financial education, Pfeg and ProShare, have themselves run into funding problems.
ProShare is due to have its state funding stopped. Pfeg continues to rely on sporadic funding and handouts from compa- nies such as Barclays and HSBC.
Meanwhile, Pfeg's Ms Parker is battling on with what seems like a thankless task. "The hope," she says, "is really that [financial education] will trickle down to the children."
HOW TO GET KIDS INTO GOOD HABITS
* Encourage them to develop a sense of responsibility by opening a young saver's account on their behalf.
* Motivate them: offer a £1 incentive if they manage to save £5 in one month.
* Make them earn part of their pocket money by doing chores.
* If your children need money, by all means lend it to them but always make sure they pay you back.
* Children learn by example, so involve them when making your own big purchases, such as a new car.
- 1 Michelle Rodriguez: Fast & Furious actor apologises after telling 'minorities' to stop taking on 'white' roles
- 2 Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face the death penalty
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 Robert Mugabe eats a zoo for 'obscene' 91st birthday party
- 5 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...
Day In a Page
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads