This edition of our guest blog comes from Alison Pask Managing Director, Financial Capability and Community Outreach at The London Institute of Banking & Finance.
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This week marks the beginning of “Financial Capability Week” across the UK. Hosted by the Money Advice Service (MAS), the long-standing campaign was created to “raise awareness of the importance of financial capability, (raise awareness of) what it means and how the organisations involved (are) making a change.”
As one of the organisation’s supporting Financial Capability Week, we have long been aware of the need for promoting the importance of effective financial education in schools. Financial education in the 21st century is a crucial life skill for young people and its effects extend far beyond the classroom. Indeed, through our work, we regularly hear from employers and businesses 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.
It may come as a surprise then, given its importance to the wider economy (one only need look at the issue of problem debt across society), that financial education was only included in the National Curriculum from September 2014. Delivered through Mathematics and Citizenship, its inclusion however, according to figures released by MAS this week, sees only 40 per cent of young people aged between 7 and 17 being currently taught about basic money management. These findings are supported by our own research, The Young Persons’ Money Index, which reveals that post-16, where financial education is not compulsory, the number drops to just a third. Among female students, according to our report, the gap is even worse, with 62 per cent not learning about money management, compared to 53 per cent of boys.
Clearly then, while an important step, the inclusion of financial education in the curriculum has not been the panacea that was initially hoped for; schools face a variety of pressures in meeting their obligations which perhaps were not fully taken into account at the time, from overcrowded curricula to their ability to hire and develop financial champions to enact effective programmes of learning. Financial Capability Week will then be an important platform for us and other likeminded organisations to make our case to policymakers and ensure we guard against the complacency of a “job done” mentality.
Pleasingly, policymakers are and have been listening to us as an industry. A new All Party Parliamentary Group on Financial Education for Young People was recently formed, tasked with exactly that; to propose improvements to and analyse the effectiveness of financial education in schools. From this, eight recommendations were developed, which touch upon developing whole school provision, empowering teachers, developing financial champions and operating an agreed-upon system of metrics to track progress.
What is clear from their recommendations, is that there is no one way to deliver financial education, which is why it is vital young people have access to a variety of channels and routes. With this thinking in mind and to support schools in overcoming their difficulties in allocating time and space in the curriculum, we recently launched our LiFE (Lessons in Financial Education) programme, which intends to build skills for life on a “learning by doing” basis. The programme is unique and is delivered flexibly online, covering several key topics which are included within the National Curriculum specification for Citizenship and Maths and we will be talking to teachers about its benefits throughout Financial Capability Week.
As an industry, 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; a lack of financial resilience is a legacy we simply cannot pass down to the next generation.