Financial education is an essential part of a child’s development to ensure that they understand the value of money and the importance of staying on top of personal finances. However, with the UK’s debt levels rising year on year, are we doing enough to ensure a future of savvy spenders?
Financial literacy has once again become a huge talking point in the UK, with millennials and those following them being labelled ‘generation debt’.While there are services in place to help people better understand how to manage their money, a culture of financing and contract leasing has left many in a position where they’re unlikely to ever be totally debt-free.
In 2014, lessons on personal finance were introduced as part of the school curriculum in the UK. However, there is still some debate on how much or little we should be teaching and the best ways in which to do it.
These are the key points that are currently being covered in UK schools according to the All Parliamentary Group on Financial Education & the Curriculum:
Key Stage 1
Key Stage 2
Key Stage 3
Key Stage 4
This all sounds well and good, with a lot of emphasis put on the practical applications of students’ knowledge, but what do the people teaching it think?
The fact that over half of teachers believe that enough isn’t being done to secure the financial future of the UK’s children is troubling and the effects can be seen in the current state of household debt.
Debt management charity StepChange which recently reported that in the first six months of 2017, 64% of people who sought advice were aged under 40.
A study by financial education experts Young Money from the same year titled ‘The Ticking Time Bomb of Generation Debt’ found that the three main causes of rising debt in younger people were:
Another factor is the increase in student debt caused by rising tuition fees leaving many young people in debt before they even enter the work force…
Students from the poorest backgrounds, who need more support from loans, will graduate with debts of over £57,000.
Interest charges begin as soon as courses start meaning students, on average, will have accrued £5,800 in interest charges by the time they have graduated.
Then there’s our increasing reliance on credit cards which are increasingly being pushed on younger consumers to ‘improve their credit rating’…
These financial problems, which are starting at a younger age for reasons described above, are having a severe knock-on effect later in life.
With confidence in the UK’s financial literacy hitting an all-time low, teachers not convinced by the curriculum and the growing issues of debt in younger generations perhaps it’s time to pay more attention to the old credo – ‘education begins at home’.83% of UK parents believe it is their responsibility to teach their children about money, yet almost 1 in 6 say they don’t feel confident about it.
Here is some advice that can be applied to everyday scenarios to help children learn more about the value of money at each stage of their development.
For more insights into the financial landscape of the UK, visit the Credit Angel blog.