Why aren’t personal finances taught more in schools?

This article is the last part of the FT’s Financial Education and Inclusion Campaign

It’s pre-lunch session at the University Technical College, Heathrow, and a class of sixth-formers are learning about risk and reward.

The students are lively and engaged, debating whether mortgage holders really own their homes, the risks involved in bitcoin trading, and the ethics of gambling. Classes aren’t just academic: many young people from 16 and 17 year olds have part-time jobs, and some are already considering apprenticeship offers or student loans.

“We are of one . . . age to learn more – to learn how to save, invest and not spend recklessly,” said Myron Mascarenhas, who in the past traded and even mined bitcoin. “We need money – we need to save for what we want.”

UTC students are not the only ones who want to learn about money matters. With the launch of its Financial Literacy and Inclusion campaign last year, the Financial Times is on a mission to democratize financial literacy with free, engaging content for young people across the UK.

“At FLIC, we aim to help young people cope with the realities of everyday life – from protection against crypto scams to the fact that it is much more difficult for this generation to find affordable housing,” said Aimée. Allam, executive director of FT FLIC.

While financial education has improved in UK schools, there is still a long way to go, with teachers citing persistent obstacles.

According to a 2021 survey by the London Institute of Banking and Finance, nearly three-quarters of 15-18 year olds said they wanted to learn more in class about managing their money. But only 15% of the 2,000 students surveyed said school was their main source of financial education.

According to an all-party parliamentary group looking into the issue, financial education in the UK is “patchy”, with many people exposed to money from an early age but not equipped to handle it.

“It’s probably one of the things they ask for the most,” said UTC teacher Louise Kelsh. In his classroom, there is a gap in understanding, with students far ahead of teachers in areas such as cryptocurrency, but lacking in knowledge of the more mundane aspects of money management.

Sharon Davies, chief executive of education and employability charity Young Enterprise, said teacher confidence, lack of access to support and training and lack of incentives were driving the downfall of financial education.

“Teachers are under tremendous pressure, so even putting him on the curriculum isn’t enough,” she said. The subject is not on the compulsory curriculum in English primary schools but has been in secondary schools since 2014.

The Money Charity, which focuses on supporting money management, described its inclusion as a “pyrrhic victory”. Financial matters, he said, were still not taught consistently due to a lack of “resources, teacher training and prioritization”.

Mark Fawcett, founder of We Are Futures, a branding agency that connects businesses and schools, said greater accountability in educational institutions could improve matters. He suggested including financial education in school inspections and making teachers answer for not focusing on it.

But educators insist that supportive measures – carrots rather than sticks – are more effective. Public funding for English schools has fallen in real terms over the past decade and, according to the Institute for Fiscal Studies think tank, will only return to pre-austerity levels next year.

That would leave budgets tight, even as schools face additional demands to help children catch up on lost learning and progress emotionally and socially following years of lockdown disruption due to the coronavirus pandemic.

According to a study by survey app Teacher Tapp, 63% of teachers said lack of time was the biggest barrier to creating a financial education program. Training is also an issue: 13 percent cited lack of expertise in the field as the main obstacle.

“We tend to tackle more and more the whole school responsibilities, taking nothing away,” Fawcett said.

This, he added, has affected disadvantaged children disproportionately, as the schools they attend tend to be larger. “Children from families with the most constant money worries get an hour-long lesson from a PSHE [personal social health and economic] teacher who may not be trained in the subject.

At UTC, the focus on professional learning highlights the importance of financial education. For time-pressed teachers, Kelsh said teaching tools make a big difference. Last week, students learned about interest rates, debt and gambling with lessons produced by banking group NatWest.

“For many teachers [reluctance to teach finance is down to] a lack of confidence in how to teach something they don’t think they’ve mastered themselves,” said Caroline Edwards, finance capability manager at the bank.

However, not all resources are created equal, and experts such as Davies warned that having materials but no guidance on how to use them sometimes made it difficult to choose what to use. had to teach. “We have to mark the quality of these products,” she said.

This is partly why the FT set up its own charity last year, the Financial Education and Inclusion Campaign, to share access to trusted financial education.

“A crucial element of financial literacy for young people is the ability to recognize when they are in demand. Financial education should be for everyone, not just potential customers,” said Allam of FLIC.

According to a survey by financial advisors, a lack of financial literacy can worsen inequality, as wealthier households typically have more time and resources to teach children about money. Research by St James’s Place found that teenagers from more affluent backgrounds performed better on financial literacy tests than their peers from lower-income households.

While working as a teacher, Tom Harbor was struck by the influence of background on education and founded the charity Learning With Parents to help families learn school subjects together.

“Schools are being asked to do so many things, they’re the social workers, they’re the core program providers and they’re everything else,” he said. “Things like financial literacy are always going to fall on the list.”

At UTC Heathrow, students believe the action on financial education can’t come soon enough.

“When we’re young, it’s very easy to think we’re going to have this money and keep getting it,” said Foad Hussein, who saves 75% of his parents’ money and part-time work, in anticipation. to become financially independent himself.

“But . . . it won’t be like this forever. You’re going to have to start paying for things soon, and it’s going to hit when you move out.

Join FT COP online webinar Monday, December 12, 1-2 p.m. UK time: Young, Gifted and Broke: A young people’s guide to weathering the cost of living crisis.