Debt consolidation service Money Advisor has found that 84% of people in the UK think children should start learning about money in primary school.
This new research comes in the same month that the credit rating agency Moody’s warns household debt could leave Britain’s lower-income families dangerously exposed as they said, “Inflation, triggered by the low pound, is now rising faster than wage growth and has put growing pressure on households, squeezing budgets and causing credit card spending to increase and savings to fall. The Bank of England has expressed concerns over surging levels of unsecured consumer borrowing on credit cards, which is going up by more than 10 per cent a year and outstripping income.”
So, at this difficult time how do we ensure future generations are prepared for turbulent financial times ahead?
Educating children around finance can help to avoid much bigger debt problems later in life
From 2013 finance education became compulsory in secondary schools, but an investigation by the London Institute of Banking and Finance found that the majority of pupils do not receive this education. The research also found that teenagers had unrealistic, inflated expectations about their future earnings.
This lack of real-world experience was also highlighted by a report from the British Chamber of Commerce, which found that young adults are not equipped well enough for working life, with 57% lacking soft skills such as communication, resilience and team work.
Financial education isn’t compulsory in primary schools, but a parliamentary report in 2016 recommended children should learn about money matters from primary level as financial education “should not be a ‘postcode lottery’, with some students left out simply due to the school they attend.’
This is a stance that Andrew Petros, Senior Financial Solutions Advisor of debt consolidation service Money Advisor, agrees with.
A lack of financial education can affect nearly every aspect of a young person’s life, from their mental wellbeing to their performance at work and even their personal health
“Educating children around finance can help to avoid much bigger debt problems later in life,” said Andrew. “We understand that many parents don’t want to burden their children with money worries, but encouraging a positive, healthy discussion around saving and spending from a young age can really help to create those long-term habits – as well as teach children other useful values such as patience, responsibility and independence.”
Russell Winnard, Young Enterprise Head of Educator Facing Programme and Services, added, “Financial capability is an essential life skill. A lack of financial education can affect nearly every aspect of a young person’s life, from their mental wellbeing to their performance at work and even their personal health. With money habits set by the age of seven, effective financial education from an early age can teach young people the differences between good and bad debt and help young people avoid behaviours which lead to bad debt.”