What do you wish you’d learnt more about in school? 91% of Brits say money and finance. There is a clear view then, that education should not just be academic, but about helping to prepare children for the real world. And as the world of money becomes increasingly complex for young people to navigate, with financial misinformation rife online, buy-now pay-later schemes commonplace, and students facing a decision at 18 that could leave them paying off tens of thousands of pounds of debt for most of their lives, it is more important than ever that we equip young people with the knowledge and skills they need.
We at the Social Market Foundation published a report making the case for universal financial education in the UK. The findings are clear – Britain has a financial literacy problem. Up and down the country, people lack the basic financial skills critical to thrive in the modern world. We lag behind other rich world countries, with only 47% of adults scoring five or more out of seven on financial knowledge questions, compared to an OECD average of 62%. Young people are particularly suffering. Our polling found that just 1% of primary school teachers believe most of their pupils have an adequate level of financial understanding, and 42% said none of their pupils did.
Financial illiteracy exposes individuals to greater risks, limits their opportunities, and – as a country – poses a great threat to our social mobility. Without good financial understanding people are more likely to fall into debt, develop gambling problems, and fall prey to scams and financial exploitation. Meanwhile, financial literacy is linked to better physical and mental health, encourages healthy saving behaviours and can enable people to make smart investment decisions. It’s not just about being numerate. You may be able to write a budget, but can you stick to one? Financial literacy also encompasses the attitudes and behaviours needed to make good financial decisions throughout our lives.
Our research highlights evidence that attitudes to money develop as early as seven years old – after that, it may be too late to make a significant difference. But provision of financial education at this age is patchy to say the least. The current curriculum does not require English primary schools to provide financial education to their students. The outcome is a postcode lottery where some schools take it upon themselves to provide (often excellent) financial education, while children in others completely miss out on these vital life lessons. Not surprisingly, it is often children from more advantaged backgrounds that win this postcode lottery – leaving behind those who would benefit the most.
We believe every primary school pupil should receive a meaningful financial education. To achieve this, England should follow the path of the UK’s devolved nations and integrate financial education into the primary national curriculum. However, doing this alone will not be enough. Teachers have to be trained and equipped with resources that empower them to deliver it confidently in classrooms.
This will come at a small price to the taxpayer, and most importantly, take up valuable time in the school day. But it is time and money worth spending. Financial education can help people avoid many social ills that ultimately add pressure to our already struggling public services. Seen through a preventative lens, investments in children’s financial skills are likely to pay for themselves over the long run. But most importantly, it can help us to lead happier, healthier and more fulfilling lives.
