Why teach­ing fi­nan­cial skills can be an ob­ject les­son in avert­ing a money cri­sis

The Herald - - PERSONAL FINANCE - IONA BAIN by Mar­garet Tay­lor Email: mar­garet.tay­lor@ her­al­dand­times.co.uk Twit­ter: @Magstay­lorht

A NEW era of think­ing on fi­nan­cial ed­u­ca­tion and knowhow will be her­alded next week at T alk Money Week events in Scot­land.

Royal Bank of Scot­land and Ed­in­burgh Uni­ver­sity will stage an event in the cap­i­tal ex­plor­ing the money skills of young peo­ple start­ing work, Aberdeen will host the Talk Money Scot­land Con­fer­ence, and a Money Ad­vice Ser­vice (MAS) re­cep­tion in Ed­in­burgh will mark the Year of Young Peo­ple.

The an­nual pro­gramme, part of the UK’S Fi­nan­cial Ca­pa­bil­ity Strat­egy, fol­lows pub­li­ca­tion last month of ev­i­dence from 65 projects funded by the Money Ad­vice Ser­vice’s What Works Fund, aimed at find­ing out what ac­tu­ally works – or does not work – in fi­nan­cial ed­u­ca­tion.

Among the or­gan­i­sa­tions re­port­ing were Young Scot, Age Scot­land and Shel­ter Scot­land in the first large-scale and joined-up at­tempt to un­der­stand how best to help peo­ple im­prove their own fi­nances.

Young Scot found that half of all stu­dents were un­aware of any ser­vices in col­lege or uni­ver­sity that could help with money man­age­ment or bud­get­ing. Sup­port was pro­vided on an in­sti­tu­tionby-in­sti­tu­tion ba­sis and there was no con­sis­tent pro­vi­sion in terms of ac­cess or qual­ity.

Stu­dents tended to press the sup­port but­ton only when they were in cri­sis and needed an emer­gency life­line from hard­ship funds.

Those pro­vid­ing the ser­vices, mean­while, did not nec­es­sar­ily have the right fi­nan­cial prod­uct knowl­edge or the in­ter­per­sonal and net­work­ing skills to do it prop­erly.

Young Scot said re­cruit­ing a group of 17- to 23-year-olds to run the pro­gramme had pro­duced pos­i­tive re­sults.

“The young peo­ple on the panel gen­er­ated ideas and so­lu­tions that re­flect the re­al­ity of young peo­ple’s ex­pe­ri­ence,” the or­gan­i­sa­tion said.

Age Scot­land’s Money Mat­ters road­shows took work­shops to ex­ist­ing groups of older peo­ple where they nor­mally meet. The char­ity’s Heather Smith said 81 road­shows had reached 1,200 peo­ple and the most pop­u­lar sub­jects had been plan­ning for change, ben­e­fits en­ti­tle­ments and care costs.

“Four out of 10 peo­ple en­ti­tled to pen­sion credit aren’t claim­ing, and no­body knows how care costs work un­til their fam­ily needs to know,” she said. “Most of those who had given a power of at­tor­ney did not know what pow­ers they had given to whom.”

Six weeks af­ter the ses­sion 82 per cent of at­ten­dees had talked to some­one about it, 40% had taken some ac­tion, and 56% thought it had made a dif­fer­ence.

“Older peo­ple are a pow­er­ful force for change if you can sup­port them to sup­port their peers,” Ms Smith said.

Shel­ter Scot­land’s Healthy Fi­nances pi­lot aims to reach the most vul­ner­a­ble and ex­cluded who will only talk about their fi­nan­cial and hous­ing dif­fi­cul­ties when they need med­i­cal help.

It works with peo­ple pre­sent­ing at GP prac­tices and hospi­tals in the most de­prived ar­eas of Dundee and Glas­gow. The MAS study found that for 153 peo­ple re­ferred to the ser­vice over 12 months, the sup­port proved suc­cess­ful, boost­ing in­comes, shrink­ing debts, im­prov­ing money man­age­ment skills, and se­cur­ing bet­ter hous­ing. This in turn led to “im­proved men­tal health”.

Shel­ter Scot­land re­ported: “For a size­able num­ber of clients, an in­suf­fi­cient abil­ity, con­fi­dence or mo­ti­va­tion to man­age their fi­nances well ap­peared not to be at the root of their hous­ing and fi­nan­cial is­sues, but rather a con­se­quence of them.”

It said hard-pressed health staff “would wel­come a per­ma­nent pro­vi­sion of the Healthy Fi­nances ser­vice, with in­creased ca­pac­ity”.

Dr David Halpern, the Gov­ern­ment’s na­tional What Works Ad­viser, said: “Mil­lions of work­ing age peo­ple have less than £100 in sav­ings.

“When the What Works Fund was launched in 2016, the ev­i­dence base for how to im­prove peo­ple’s fi­nan­cial ca­pa­bil­ity was thin.

“The fund is now help­ing ad­vance our un­der­stand­ing of the most ef­fec­tive ways of help­ing peo­ple man­age their money bet­ter.”

This week Uk-wide re­search from the Lon­don In­sti­tute of Bank­ing and Fi­nance re­vealed the amount of time spent on fi­nan­cial ed­u­ca­tion has dropped sharply in the past year, with only 33% of pupils re­port­ing hav­ing a les­son in the past month, down from 43%.

The re­port said: “Wor­ry­ingly, 14% said their most re­cent les­son was ‘in the last term’ and for 23% it had been a year or more since they’d had any fi­nan­cial ed­u­ca­tion.”

The re­search also found 71% of re­spon­dents worry about money – up from 62% in 2017 – while 83% said they want to learn more about money in school.

Pic­ture: An­thony De­vlin/pa

„ Ev­ery penny counts and teach­ing chil­dren how to man­age their fi­nances is thought to be key to bet­ter fi­nan­cial de­ci­sions when they grow older. Re­search has re­vealed the amount of time spent on fi­nan­cial ed­u­ca­tion has dropped sharply in the past year and 83% of pupils ques­tioned in a sur­vey said they want to learn more about money in school.

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