The majority of young people are not receiving any form of financial education in schools despite it now forming a compulsory part of the curriculum, says a new report from the London Institute of Banking and Finance.
The Young Persons Money Index, now in its third year, reveals that 58 per cent of 15 to 18 year olds do not receive financial education. The proportion of young people learning about finance in school remains static, with 57 and 59 per cent recorded for 2014 and 2015 respectively, even though it is compulsory in the National Curriculum.
Furthermore, only seven per cent of young people cited their school or college as their prime source of financial understanding, with 80 per cent stating it came from their parents or family.
The study revealed that fewer female students are receiving lessons in financial education than male students (36 per cent and 45 per cent respectively). It also highlighted that teenagers have huge expectations for their future salaries because they are not receiving a sufficient financial education. Boys believe they will earn a salary in excess of £54,000 by the time they are 30 and girls believe they will earn £42,850. Currently, the national average for this age is £30,400 and £27,500 respectively.
Alison Pask, Managing Director, Financial Capability & Community Outreach, said: “Two years on from its introduction into the national curriculum, our research from the Young Persons’ Money Index still points to a state of inertia in the delivery of financial education.”
“Still we are seeing too many young people – a majority in fact – finishing their GCSEs or other pre-16 qualifications, without ever having had a formal lesson on their financial wellbeing,” continued Alison. “This ultimately plots a course whereby teenagers leave school or college and enter an economy which demands of them at least a grasp of financial understanding; where they are forced into making independent and sometimes life-affecting decisions without fully understanding the long-term consequences of their actions.”
“If we are serious about implementing effective financial education, we need to support schools by providing time, resources and achievable goals for its delivery. We also need to empower teachers to deliver the subject by including financial understanding within part of their own development programmes. If we do not, the economy as a whole will ultimately suffer, with more of the societal problems around debt and financial exclusion we see today.” said Alison.
The Young Persons’ Money Index surveyed over 2000 15 to 18 year olds, all of whom are UK based and in full-time education. The sample is fully representative in terms of age, gender, region and education.
For more information, visit the London Institute of Banking and Finance’s website.