Why isn’t personal finance taught more in schools?

This article is the latest installment of the FT Campaign for Financial Literacy and Inclusion

It’s lunchtime at Heathrow University Technical College and the sixth-formers are learning about risk and reward.

Students are lively and busy, debating whether mortgage lenders really own their homes, the risks of bitcoin trading, and the ethics of gambling. The lessons are not just academic. Many 16- and 17-year-olds have part-time jobs and some are already considering apprenticeships or student loans.

“We don’t . . . age to know about this. learn how to save, invest and not spend recklessly,” says Myron Mascarenhas, who used to trade and even mine Bitcoin. “We need money. we have to save for what we want.”

UTC students are not alone in wanting to learn about money matters. With the launch of its Financial Literacy and Inclusion campaign last year, the Financial Times set out 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 now, from protecting themselves against crypto-scams to the fact that affordable housing is much more difficult for this generation,” said FT FLIC CEO Aimee Alam.

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

Almost three-quarters of 15- to 18-year-olds said they wanted to learn more about how to manage their money in the classroom, according to a 2021 survey by the Institute of Banking and Finance in London. But only 15 percent of the 2,000 students surveyed said school was their primary source of financial education.

Financial education in the UK is a “patchy” with many exposed to money from a young age but lacking the skills to manage it, according to an all-party parliamentary group investigating the issue.

“It’s probably one of the things they ask for the most,” UTC teacher Louise Kelsch said. There is an understanding gap in his classroom, where students are well ahead of the teachers in areas such as cryptocurrency, but lack knowledge about the more mundane aspects of money management.

Sharon Davies, chief executive of education and employability charity Young Enterprise, said teacher confidence, a lack of access to support and training and a lack of incentives were causing financial education to fall behind schedule.

“There is enormous pressure on teachers, so even putting it on the curriculum is not enough,” he said. The subject is not included in the statutory curriculum for English primary schools, but is for secondary schools since 2014.

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

Mark Fawcett, founder of We Are Futures, a branding agency that connects companies and schools, said greater accountability in educational institutions could improve the situation. He suggested including financial education in school reviews and holding teachers accountable for not focusing on it.

But educators argue that supportive measures—the carrot, not the stick—are more effective. Public funding for schools in England has fallen in real terms over the past decade and, according to the Institute for Fiscal Studies think tank, will not return to pre-birth levels until next year.

That will result in budget squeezes even as schools face extra demands to help children catch up on missed learning and progress emotionally and socially in the wake of years of disruption due to the coronavirus pandemic.

According to a study by the survey app Teacher Tapp, 63 percent of teachers said that lack of time is the main barrier to creating a financial education program. Training is also a problem. 13 percent cited lack of subject matter expertise as a major barrier.

“We tend to shovel more and more into the overall responsibilities of schools without taking anything out,” Fawcett said.

This, he added, has disproportionately affected disadvantaged children because the schools they attend are more stretched. “Children from families with chronic financial worries are given a one-hour lesson in PSHE. [personal social health and economic] a teacher who may not be trained in the subject”.

The focus on professional learning at UTC emphasizes the importance of financial education. For time-pressed teachers, Kelsch said teaching tools make a big difference. Last week pupils learned about interest rates, debt and gambling in lessons from 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’re good at,” explained Caroline Edwards, head of financial capability at the bank.

Not all resources are created equal, however, and experts like Davis cautioned that having materials but no guidance on how to use them can sometimes make it difficult to decide what to teach. “We have to celebrate the quality of these products,” he said.

That’s partly why the FT set up its own charity last year, the Campaign for Financial Literacy and Inclusion, to share access to trusted financial education.

“An important element of financial literacy for young people is the ability to recognize when they are being marketed to. Financial education should be for everyone, not just potential customers,” said Allam of FLIC.

A lack of financial literacy can exacerbate disparities because wealthier households tend to have more time and resources to teach children about money, according to a survey of financial advisers. Research from St James’s Place found that teenagers from wealthier backgrounds scored higher on financial literacy tests than their peers from lower-income households.

While working as a teacher, Tom Harbor was inspired by his background in education and founded the charity Learning with Parents to help families learn school subjects together.

“Schools are required to do so much, they’re the social workers, they’re the core curriculum, and they’re everything else,” she said. “Things like providing financial literacy always come down the list.”

Students at UTC Heathrow believe action on financial education cannot come soon enough.

“When we’re young, it’s easy to think we’re going to have this money and keep getting it,” said Fouad Hussain, who saves 75 percent of the money from his parents and a part-time job in anticipation of becoming. himself financially independent.

“But. . . it won’t be like this forever. Soon you have to start paying for things and it will hit you when you get out.”

Join FT FLIC! online webinar Monday 12 December, 1300-1400 UK time. Young, gifted and broken. a young person’s guide to navigating the cost-of-living crisis.

A letter in response to this article.

Britain needs new ways to teach financial literacy / from John Hunter, Orpington, Kent, UK