Financial education has the potential to equip young people with the confidence and skills they need to build their futures, open the door to a world of opportunities and transform their lives. However, the level of financial capability in the UK is falling short of where it should be.
In fact, just 38% of children receive some form of financial education in school and, according to Santander UK, two-thirds of young people believe that a lack of financial education has led them down the path to debt.
We need to see increased collaboration between schools, the third sector, government and employers to help people develop a healthy relationship with money from a young age and build a generation of financially capable individuals.
… two-thirds of young people believe that a lack of financial education has led them down the path to debt
Research has found that children begin to form their mindset around money habits between the ages of three and seven, so it’s essential that we educate children around money and finances while they are in primary school, despite financial education not being part of the curriculum.
Some examples include learning about the various ways money can be earnt, the importance of being able to budget and save money, and the best routes to borrow or make investments. Moreover, developing an understanding of the real-life implications for personal debt and how to navigate taxes will help individuals form a deeper, more practical financial mindset from a young age as they approach the world of work.
Shifting financial landscape
Today, young people are growing up in a rapidly shifting financial landscape. Aside from deciphering which financial products and saving programmes are most appropriate, they are also having to recognise the threat of online scams, financial misinformation on social media channels and cryptocurrency adverts that appear to be endorsed by their favourite celebrities.
That’s why it is essential that young people are equipped with the knowledge to navigate these challenges.
Empowering children with the tools and awareness to make informed financial decisions will not only better prepare them to deal with the everyday facets of life but will also help them to plan for their future.
For many young people, the first significant financial decision they will make is choosing whether they should continue to further their education – for example, by completing a degree at university, attending college or applying for traineeships. Having a sound financial education to draw from can help individuals make informed decisions and increase their opportunities, by empowering young people with the confidence to thrive in their choices.
Prioritising financial education can also open up significant opportunities for schools, teachers and the wider community. Making conversations about money and finances more real, relatable and practical will help young people engage more with their learning.
This view was confirmed in a recent survey Young Enterprise conducted with teachers which found that 96% of them agree that being able to apply learning in real-world contexts is important.
Structuring the learning framework around personal development subjects can also help students to develop into well-rounded individuals who are equipped to pursue financial goals and provide a positive influence on their local community.
Most importantly, though, financial education can form a core part of school safeguarding. By providing a financial education from a young age, schools and teachers can help support students to gain the tools they need to protect themselves from financial harm and reduce stress and anxiety in an increasingly technical world. This is crucial at a time when 6 out of 10 young people report that the Covid pandemic has made them feel more anxious about money.
At Young Enterprise we are passionate about developing the financial capability of the next generation of young people and bridging the current gap in knowledge, skills and mindset
These measures should not be left to teachers and schools to implement on their own; we should look outside of the formal education environment and support parents, carers, youth workers and communities to financially empower young people.
At Young Enterprise we are passionate about developing the financial capability of the next generation of young people and bridging the current gap in knowledge, skills and mindset. That’s why we launched My Money Matters, a digital programme designed to help young people thrive in today’s society and develop a positive mindset with money.
Through impactful insight into relevant topics such as cryptocurrencies and the shift towards a cashless society, the programme can help to break down the current financial barriers and support young people to leave school with the knowledge, skills and mindset they need to make positive financial decisions.
Without a doubt, learning about money from a young age can positively influence financial futures and has the power to transform lives. That’s why it is essential that we prioritise financial education and provide the necessary support to enable young people to develop and sustain this core life skill.