7 Ways to Support Children and Young People to Become Financially Literate

88% of Brits say they lack confidence with their money. One-third of Brits (32%) said their lack of confidence with money led to a negative impact on their mental health.

4 minute read | #finance #pensions #saving #money #investment

Supporting Children and Young People to Be Financially Literate

A staggering 91% of Brits said they lack confidence in investment
(Freetrade)

As Dan Lane, senior analyst at Freetrade, states, “These results should be a wake-up call for the nation’s education system to equip young people well enough to put theory into practice.”

Research shows that financial education makes children and young people more likely to:

save money,
have a bank account, and
be confident with money management.

(Money and Pensions Service)

So, what are schools currently delivering in terms of financial education? And how can we improve things so that children and young people develop knowledge of confidence with financial matters?

Is Financial Education Taught in the UK?

Being financially literate means having a sound grasp of concepts such as saving, investing, inflation and debt. Financial education in schools could (and should) address this. Yet despite financial education becoming part of the National Curriculum in 2014, the quality of teaching that pupils are receiving appears patchy and inconsistent. Even the financial education lessons that are taking place are often lacking in real-life context – rendering them of little use to students in their adult lives.

In England, financial education isn’t on the primary school curriculum – only in secondary schools is it taught through citizenship and maths. However, financial education is taught in Ireland, Wales and Scotland in primary schools, in many cases from the age of 4 years old.

An estimated 5.3 million children in the UK are currently missing out on vital skills and knowledge relating to finance. That doesn’t bode well for improving Brits’ confidence with money!

What Do Children and Young People Say about Financial Education?

The London Institute of Business and Finance carried out a survey in 2021. 2,000+ young people between the ages of 15 and 18 were surveyed.

83% said that they wanted to learn more about the financial system in school.
A further 67% reported that they were regularly worried about personal finances.
41% didn’t know how a student loan works.
60% said they would prefer financial education to be a separate subject, rather than delivered as part of maths, citizenship or PSHE.

How Can We Effectively Teach Financial Literacy Skills?

While many young people said they’d rather have specific lessons devoted to financial education, the merit of teaching through maths and citizenship shouldn’t be ignored. It’s perhaps how we teach it through these subjects that need to be considered in more depth.

Pupils’ experiences, backgrounds and needs will vary greatly so the financial education they receive needs to be fit for purpose, highly relevant and truly inclusive.

To make a difference to students’ financial education, we can:

Start talking about money early: Primary schools can deliver age-appropriate learning experiences linked to money to children as young as three or four. This helps young children become familiar with the concept of money and build confidence with the language and terminology.
Provide opportunities for students to use money: Pupils can be involved in charity fundraising, could be set a task where budgeting and spending is involved, or you could even organise a school savings bank. Experiential learning can be so much more impactful than textbook learning.
Make learning timely: As pupils approach the age of 11, they can be taught about opening bank accounts. Many young people get mobile phones and subscriptions to online gaming around this age, too, so they can be taught about budgeting for and paying their bills. Later, older pupils can be taught about student loans, the real cost of attending University, living expenses and accommodation costs in their local area.
Create safe spaces where pupils can develop and share their feelings towards money: Financial education isn’t just learning about adding, subtracting and calculating percentages; children and young people need to be able to consider and discuss their needs and wants, their relationship with money and their goals for the future.
Extend learning to families: By involving parents and carers, we can boost the success of financial education. Families can develop their learning together and parents/carers can get involved in ‘hands-on’ activities prompted by the school.
Involve reputable organisations: Many organisations, including banks and building societies, offer good-quality resources or toolkits that can be used in schools to add reality and weight to the learning.
Keep it current and relevant: Children and young people want to learn about money in a way that they can relate to. Discuss the ads, information and advice they see online, including social media; ask them about the cost of the clothing they want to buy, and help them think about how much driving lessons are likely to set them back.

Financial education really is worth investing teaching time and effort in. According to the Money and Pensions Service 2019 report, among those who recall it, 90% of children and young people said that learning how to manage their money was useful. It’s life skills like these that the current curriculum can neglect but their value is indisputable.