Financial education to help build a better future

As teachers and students adapt to new ways of learning, we should take the opportunity to expand their skills to shape their future financial wellbeing.

Financial education is increasingly important, and not just for investors. The growing sophistication of financial markets means that consumers can often be offered complex financial instruments.

Understanding these options is vital in deciding which is the right one. It can also alert individuals to the risk of fraud. Building financial literacy can have an important impact on an individual’s life, from the savings we can build for our pensions and future generations, to funding our entrepreneurial dreams.

London Stock Exchange Group (LSEG) is committed to helping consumers understand their financial options and learn more about the way that finance works. Londonstockexchange.com includes a “Personal Finance Hub” and a free tool, which enables anyone to create virtual portfolios of securities listed on London Stock Exchange, along with a selection of global securities.

One can simulate stock market investments and monitor and evaluate their performance. It’s a simple and secure way for anyone to get familiar with the world of finance. More broadly, LSEG supports MyBnk, a UK charity that delivers financial education programmes for 5-25 year olds. The charity focusses on key money management skills and positive financial habits to help young people develop their understanding of topics such as budgeting, borrowing, student finance and pensions.

In April, as a response to the pandemic and subsequent closure of UK schools, LSEG launched a digital Financial Literacy for Children programme to assist with home schooling. The programme includes videos created by our charity partner City Pay It Forward.

These videos are divided into primary and secondary school age content, covering topics such as how banks work and the role of a stock exchange. Children can also access case studies of well-known companies listed on London Stock Exchange to understand how public markets are supporting the real economy. These include Wakefield-based video games developer and publisher Team17 and Hotel Chocolat, one of the world’s few chocolate retailers to grow their own cocoa.

The importance of sustainability underpins the financial markets. As a result, green finance is an important part of the Financial Literacy for Children programme. Protecting our environment and tackling climate change is one of the biggest challenges we are facing globally.

The Covid-19 pandemic has also served as a reminder of the importance of supporting social initiatives, such as healthcare and employment. As part of the programme, children can learn about the different London-listed companies that are developing and investing in renewable energy like solar and wind power. They can also learn about companies that are finding more effective ways to manage and recycle our waste and inventing new technologies that will make our daily lives and activities more sustainable.

The role of a stock exchange can be vital in facilitating capital and investment to these companies. This funding is key to supporting innovation and growth and enable consumers to be part of and ultimately benefit from the transition to a greener economy.

Every one of us is part of the financial ecosystem. But unless we have an understanding of that system, we cannot make informed choices. At LSEG, we believe that financial literacy opens options and opportunities for all. Whether it’s choosing what to study, what career to work towards, or learning about how to save and invest money later in life, understanding how finance works can help build a better future for us all.