Teach the young to be cash smart
Financial education is joining the national curriculum next year, but it's not just up to schools. Chiara Cavaglieri reports
Saturday 31 August 2013
They may not be allowed to vote, drink or drive, but the UK's under 18s are making important financial decisions and developing money habits, both good and bad, from a surprisingly young age – and without any formal money education.
As thousands trudge back to school after the summer break, they may not be guaranteed even the most basic guidance right now but financial skills will finally be incorporated into the national curriculum in 2014. Only time will tell if it encourages a more financially responsible generation.
So how can you give your children a head start?
Leading charity pfeg (the Personal Finance Education Group) has long been campaigning for financial education in schools, highlighting the dangerous gaps in the knowledge of young people.
The group has uncovered widespread misunderstanding of many basic principles of money management among 14-25 year olds.
Nearly half cannot interpret bank statements and the difference between being in credit and overdrawn, while more than one in four don't know that a lower APR (annual percentage rate) is more attractive than a higher one when taking out credit, its research has found.
Research has also shown that adults exposed to financial education in school accumulate greater wealth and are more likely to save for retirement, therefore proving less of a burden on taxpayers in later life. The Centre for Economics and Business Research found that a lack of financial education is a huge drain on the wider economy, costing £3.4bn a year in debt, mis-sold financial products and issues such as unemployment and retirement provisions.
Financial education couldn't be more relevant today – young adults have access to more forms of credit than their parents' generation ever had and many will leave university with huge levels of debt.
The move to bring in financial education as part of the compulsory national curriculum, starting in September 2014 in England, is a crucial step. The new programme covers financial mathematics, while the decision-making aspects of finance will feature in citizenship lessons.
At key stage three children (ages 11-14) lessons will cover the functions and uses of money, the importance of personal budgeting, and managing risk. At key stage four (ages 14-16) lessons move on to cover income and expenditure, credit and debt, insurance, savings and pensions, as well as a range of other financial products and services.
Parents, of course, have a key role to play, not least because many charities argue we need to see it taught in all primary schools and in the growing number of academies and free schools that are not bound to follow the national curriculum.
“The responsibility to give children the skills, knowledge and confidence they need to manage their own finances shouldn't be left entirely in the hands of schools. Reinforcement at home is just as important,” says Kate Moore from Family Investments.
Pocket money is an ideal educational tool and can be used to encourage positive behaviours such as earning money for chores and saving up for treats. There are even The Financial Fairy Tales to read the little ones at bedtime to make learning about money less of a chore. Recent research by the Money Advice Service shows that adult financial habits are formed by the age of just seven years old – so the earlier children can start to learn, the better.
Families as a whole may need to work together to improve their knowledge. Family Investments has conducted workshops throughout the country and found 83 per cent of 14-16 year olds turn to their parents for financial advice. The problem, however, is that over a third of parents do not feel competent in advising their children about the simplest of bank accounts let alone more complicated financial matters such as investments or pensions.
For outside help, the likes of pfeg and Money Advice Service offer free resources such as smartphone apps and online tools for various age groups.
Elsewhere, while care should always be taken when it comes to commercial sources of guidance, several banks and building societies have put their name to free programmes offering self-help guides and workshops for pupils, parents and teachers including Barclays Money Skills community programme (www.barclaysmoneyskills.com), Lloyds' Money for Life (www.moneyforlifeprogramme.org.uk) and Nationwide Building Society's (www.nationwideeducation.co.uk) which focuses on improving numeracy skills.
Santander has also teamed up with pfeg to fund a free programme of financial education (www.pfeg.org/services/centres-excellence) to 40 secondary schools, working with teachers to integrate personal finance into the school curriculum and improve the money-management skills of their students. Once these schools receive their “Centre of Excellence” status, the onus is on them to pass on their knowledge and experience to other schools in their area.
20 December 2012 09:07 AM
20 December 2012 09:10 AM
Fee-free, expert mortgage advice:
- Find the right mortgage for you
- Latest best-buy deals
- Mortgage calculators
Investors told to travel the world in the search for higher returns
Peer-to-peer lending rates put Nisas to shame
The most expensive cities in the world 2015
Pension freedoms: How to deal with cold calls from scammers
Is there a connection between luxury student accommodation and high levels of debt?
- 1 Video of Irish 'professional boxer' fighting Istanbul neighbourhood goes viral in Turkey
- 2 Novel Scarlett Johansson tried to ban, Grégoire Delacourt’s The First Thing You See, to be published in UK
- 3 Toby Sheldon: Justin Bieber lookalike found dead in motel room
- 4 A pint of water every day is the key to losing weight, scientists say
- 5 Russia 'accidentally reveals' number of its soldiers killed in eastern Ukraine
Dresden riots: Protesters in Germany attack refugee buses shouting 'foreigners out'
France train shooting: US soldiers speak of the moment they stopped gunman and 'beat him until he was unconscious'
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith calls for urgent ESA overhaul as part of drive to cut down welfare costs
iJobs Money & Business
£20000 - £25000 per annum + competitive: SThree: Are you passionate about sale...
£25000 per annum + benefits: Ashdown Group: A large financial services company...
£20400 per annum: Ashdown Group: An established and highly reputable organisat...
£20000 - £100000 per annum: Recruitment Genius: We are a successful and establ...
Day In a Page
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
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.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.
This recently-refurbished three-bedroom home has bi-folding doors that lead out to a decked seating area - ideal for alfresco dining this summer.