Financial education - why do we need it?

A decade ago, many teachers were unconfident in teaching their pupils about money. In recent years, a ground swell of opinion among schools, parents and campaigners has developed in favour of giving children and young people the tools to become financially capable from an early age. Since 2000 pfeg has played a key role in transforming the landscape by supporting teachers and raising awareness.

 

What do we mean by financial education?

Financial education is a programme of study that aims to equip young people with the knowledge, skills, and confidence to manage their money well.  High quality teaching ensures that learners  grow to understand their attitude to risk, and become aware of their own behaviour and emotions when making financial decisions. It is also achieved through applied learning, for example as a context for teaching mathematics, where students grasp mathematical concepts through real-life scenarios.

In September 2014 it became a statutory requirement for maintained schools in England to teach financial education in mathematics and Citizenship, making it part of the curriculum across the UK. But here at pfeg we know that, for many years, schools have recognised the benefits of teaching their pupils about money matters and have taught it non-discretely across the curriculum, and as part of the personal, social, health and economic education framework.

Watch our short films for a no-jargon approach to financial education and where it fits in the curriculum. 

Why do young people need it?

According to research carried out by ING for pfeg in December 2013, just 5% of UK adults believe that young people are currently leaving school with the financial skills and knowledge they need to manage their finances. This compares unfavourably with the experiences of the adults surveyed, with more than three times as many (16%) believing they had left school adequately equipped to manage money well.

Despite the arrival of new technology such as online and mobile banking, 60% of UK adults believe that managing money is more difficult now than it was 10 years ago, with only 12% finding that it had become easier. The shift towards an increasingly cashless society, and more financial products and services than ever before, is making it harder for young people to navigate their personal finances. It is in this context that financial education should be an entitlement for each and every young person in order to be able to make the most of their opportunities: in education, in careers, and as future citizens.

At pfeg, we know that the classroom setting is the most efficient way to reach the widest number of young people, with a teacher who understands their students' circumstances and needs. In the evaluation of My Money Week 2013, 85% of teachers surveyed said children showed an increase in skills and knowledge about money, with 82% reporting that children were motivated to learn more. This is unsurprising, when our research shows a dangerous gap in financial knowledge: nearly half (42%) of 14-25 year olds cannot interpret the difference between being in credit and overdrawn on a bank statement.

What has pfeg’s role been?

pfeg became a registered charity in 2000 and in 2014 it became part of Young Enterprise forming the UK's leading charity that empowers young people to harness their personal and business skills. pfeg has played a key role in growing both the quality and the quantity of financial education in schools. Major projects in primary and secondary schools, training teachers,producing and accrediting high quality teaching resources and holding the annual My Money Week have all transformed the way in which financial education is taught.

Our campaigns and partnership work has kept financial education high on the agenda with politicians and other influencers. pfeg provides the secretariat to the All Party Parliamentary Group on Financial Education for Young People, which conducted the inquiry that resulted in a call for financial education to be a compulsory part of every school’s curriculum, which was recognised by the Department for Education in February 2013.