17th September, 2024
The statistics surrounding young people and financial know-how make for frightening reading.
- 37 per cent of 18–24-year-olds are in debt, owing nearly £3k on average
- Only 27 per cent know what their credit rating is and how it affects them
- 37 per cent of those in debt say they have no plan to repay the money, and
- 42 per cent say they found managing money harder than expected.
And it doesn’t stop with young people. Two in five adults don’t feel confident managing their money. That’s an incredibly sobering statistic – especially when you consider there are well over 50million adults in the UK, meaning that two in five translates to well over 20million people
The only way I can see to reverse this worrying trend - and eradicate the impact it will have on these young people in later life – is to make financial education a mandatory part of secondary education. Yes, it does form part of the school curriculum across all UK nations, but it’s abundantly clear that it’s a far from adequate provision. In fact, such is the shortfall, the subject was discussed in the House of Lords earlier this year; with Baroness Sater asking the Government what steps they were taking to improve the financial literacy of children through the provision of financial education in schools.
A lot was made by the then Minister for Schools, Nick Gibb of the importance of “good maths” in providing a strong foundation for financial literacy. But there’s a big difference between having a mathematical knowledge of finance and leaving school with a strong understanding of how finance works and how you can make the most of your money.
We (Skipton Business Finance) are a partner of financial education charity, WizeUp, and at present it’s such as them who are shouldering the vast majority of the burden in trying to turn round the fortunes of the latest generation of secondary school students.
During the 2023 / 2024 academic year, the charity delivered financial literacy sessions in 181 schools across England – a tenth of which catered for students with special educational needs and disabilities (SEND).
During a recent day at Hall Cross Academy in Doncaster, the sessions were aimed at helping students understand the importance of saving and being able to recognise that investing is a long-term process rather than a quick profit strategy. Workshops covered saving methods, risk appetite, paying / credit options and routes to finance.
While the subject matter may seem dry, when put into the context of real-life purchases – whether it be a car or a house – and presented as a game – “How will you pay?” – it brings the process to life and creates real engagement with students.
It’s clear that it’s this kind of relevant and informed approach; delivered by financial and educational experts; that needs to be harnessed in order to eradicate a knowledge gap that is hampering the financial well-being of millions of lives across the UK.
Without it, we’ll keep on churning out hundreds of thousands of school leavers each and every year, many of them with great qualifications, but with little or no idea of how finance works.
Yet, with just a little bit of joined up thinking, we can set the bar at the right level so that this and future generations leave school armed with not just their GCSEs and A-levels, but a level of financial savviness that will stand them in great stead for coping with the demands of life beyond school.
Matthew Shepherd is Chief Commercial Officer of Skipton Business Finance – a nationwide working capital solutions provider, which is part of the Skipton Group.
ENDS
For more information on this story, please contact Sophie Brown at sbrown@skiptonbf.co.uk.