Towards the end of last year, the Money Advice Service (MAS), along with other financial education charities – ourselves included – came together to promote ‘Financial Capability Week’, to raise awareness of the importance of financial education for children, young people and wider communities.
The week is a nationwide affair and features a range of events and conferences, as well as providing the opportunity for industry-leading research to be published, which looks at the effectiveness of financial education programmes currently being offered in schools and colleges. Organisations of all kinds take part, ranging from financial education charities and educational think-thanks to global financial services organisations and schools, all working together to share their insights and agree on best practice.
That such a week is still needed, nearly three years after the inclusion of financial education – through Citizenship and Mathematics – into the National Curriculum, shows how much still needs to be done to ensure every student leaves full time education confident in their ability to manage their affairs and make confident and proactive financial decisions.
As educators, we all have a role to play in boosting the importance and stature of financial education in our schools. It is not just the responsibility of the government, the banking and finance industry, or schools and colleges themselves.
But it is not just the practical application of financial education that makes it a crucial life skill for young people in modern Britain. Few could argue that it is not a good idea that young people understand concepts around saving and borrowing, expenditure and debt, but effective programmes of financial education provide benefits far beyond what one would expect, both for student and teacher alike.
Financial education feeds into wider school curricula and students taking financial education qualifications often excel in other subject clusters. It is perhaps not wholly surprising that generally speaking, those students learning about personal finance also have a strong grasp of mathematics, business studies, economics and politics. For teachers delivering the subject, it can provide a unique source of learning material to be used both professionally and personally.
For schools too, beyond equipping their students with practical skills they can use throughout their lives, there are also wider advantages to be gained. Our financial education programmes are measured within Progress 8, fall within the remit of Pupil Premium and carry maximum UCAS points.
We have been running our standalone qualifications in personal finance at Levels 2 and 3 (GCSE and A-level equivalent) for more than a decade and in that time more than 200,000 young people have studied our programmes. We also run a unique Lessons in Financial Education (LiFE) programme, which is a flexible programme of study where students can learn at their own pace. As such, we have gained a unique insight into the wider benefits the subject provides. One of the key areas in which the benefits are demonstrated is through developing employability skills. We regularly hear from employers and businesses for instance, who extol the virtues of a financially capable workforce and value highly the wider skills it teaches, from developing research skills and resilience to honing analytical approaches with regards to decision-making, which are tested constantly in the world of work.
While progress has been made, research from our annual Young Persons’ Money Index reveals that 58 per cent of young people aged 16 and below – where financial education is compulsory – do not receive any form of it, while for those over 16, the situation is worse, with 62 per cent leaving school or college without a basic grasp of how to manage their finances.
As educators, we all have a role to play in boosting the importance and stature of financial education in our schools. It is not just the responsibility of the government, the banking and finance industry, or schools and colleges themselves. Collectively we must work together to ensure schools are empowered to provide challenging programmes of study, allowing them to reap all of these benefits.
For more information on The London Institute of Banking & Finance’s financial capability programmes, please visit: www.libf.ac.uk/finanical-capability