Alison Pask, Vice Principal of ifs University College, says in the report: “Originally commissioned in the early part of 2014 by financial education specialist ifs University College, the first Young Persons’ Money Index revealed a concerning, if not unexpected picture of financial literacy among UK teenagers.
Where it existed, financial education was delivered in schools and colleges inconsistently, in a piecemeal fashion and unfortunately, was largely ineffective.
“The college firmly believes that every teenager should receive consistent and high quality learning experiences and should leave school for the next stages of their lives with the confidence and ability to manage their own personal finances. Today’s students are tomorrow’s consumers and we owe it to them to understand their hopes and concerns for their futures.”
The report focuses on four areas: financial education, expectations, financial behavior and effects of the education. The main theme emerging from the research is that, despite 97 percent of respondents considering themselves ‘financially active’, fewer GCSE students say they learn about personal finance in school compared to 2014’s results. Many claim to learn about money from their parents, relying on them to manage bank accounts and spending. This can be a good influence if the right habits are taught – but if unrealistic expectations or limits are set, this could have an effect in later life.
So, how can a school play its part in ensuring the financial awareness of its’ students? Some subjects already contribute to this, with 37 percent of students reporting that they learn through Economics classes and 36 percent through Maths. In post-16 education, students learn about finances in Economics and PSHE (26 percent in each).
Kathy Crewe-Read, Head of Wolverhampton Grammar School, says: "Clearly this report is telling us nothing new in that many students are still lacking the skills and knowledge they deserve about how to understand their financial world. At Wolverhampton Grammar School, we expect all students will have to manage their own finances to some extent and as would-be voters we want our young people to be informed enough to be able to hold the economic and fiscal policy of the government to account.
“Aspects of finance are incorporated into both the curriculum from year seven, extracurricular clubs like debating and economic societies are available to get students to discuss what economics means to them and many of our sixth form take an optional qualification from the Institute of Financial Studies, aimed at increasing their confidence and competence to plan and manage their finances as adults. Schools shouldn't just teach that which is stipulated by government, but should look to how they can creatively incorporate financial debate, discussion and understanding into co-curricular activities too."
Key research findings
28% of 17-18 year olds receive formal financial education prior to starting university or work
56% feel they have enough knowledge to manage their own money
Students earn an average of £111.28 per month, mainly from part-time jobs
The report concludes that students need more skills around personal finance to support and give them confidence in the next stage of their lives. Suggestions include teaching how to manage bank accounts and bills, or more consistent Citizenship teaching.