One of the best places for children to learn the art of financial management is in the classroom. Pupils who leave school without a firm grasp on how to manage their financial affairs are easy targets for loan sharks.
You can imagine my horror when a report landed on my desk which painted a sombre picture of the state of financial education in UK schools.
The report concludes that financial education is inadequate and leaving young people unprepared for life. The research from The London Institute of Banking & Finance, found that financial education in schools is happening too infrequently to make an impact.
Many young people are worrying about their financial future, presumably because they lack confidence in their ability to handle the stresses and strains of adult life.
For decades, educationalists and industry leaders have been calling for a systematic approach to teaching personal finance. Superficially, things seem to have improved. The number of young people reporting they receive financial education in school has jumped, from 44 per cent in 2017 to 62 per cent in 2018.
However, the amount of time spent on financial education has dropped dramatically. Only 33 per cent of the children who responded to the survey said they had a lesson in the last month, compared with 43 per cent in 2017.
Worryingly, 14 per cent said their most recent lesson was in the last term and, for 23 per cent, it had been a year or more since they’d had any financial education.
The 2018 Young Persons’ Money Index found that financial education is often included as a part of lessons about other subjects, such as maths and citizenship.
Just three per cent of respondents reported having dedicated personal finance lessons, which is an incredibly small number.
There is no question that young people want more guidance from teachers about managing money. Around 71 per cent of the teenagers quizzed as part of the survey said they were worried about money, which is an increase on the 62 per cent recorded last year.
Alarmingly, 81 per cent of 17 and 18-year-olds said they were anxious about money problems. Growing numbers said they are being exposed to scams. Eighty three per cent of the young people surveyed said they wanted to learn more about money at school
Alison Pask, the managing director for financial capability and community outreach at The London Institute of Banking & Finance said: “The current approach can only scratch the surface of what children need to know about money, meaning they’re woefully unprepared for life.
“Being able to calculate interest rates and understand some financial concepts is useful, but that doesn’t add up to a financial education.
“Financial education is not being given enough time in the classroom, it’s not being taught in the right context and it’s not being delivered frequently enough. Young people need help understanding the practicalities of managing money – day-to-day and for the long term – and teachers need support to deliver that.
“We need to look at what’s being taught, how that’s being delivered and make sure there’s enough time on the curriculum.
“Otherwise we risk another generation growing up without the essential knowledge they need to manage money well.”
The London Institute of Banking & Finance is calling for clearer guidance to be given to teachers about what financial education should cover and for financial education to be allocated at least an hour a week.
I would go further than this and call for a universal financial management test for all pupils before they leave school.
If you understand the dangers of stretching your finances, you are less likely to be an easy victim for the army of crooks who prey on the vulnerable. In a virtual age, where financial data can leak, it is wise to embrace the virtues of prudence and discretion.
When it comes to financial education, no child should be left behind.