A vital education for young nation

Why we must teach children the value of money

This week was results week for schools and colleges across the UK.

While children are normally graded on their ability to pass exams, this year they have had to navigate themselves through the unfortunate events of lockdown and the newly founded Teacher Assessed Grades – or TAGs, as they’ve become known.

It’s been a tough time for my two children Olly and Bella, who thrive on social interaction with their friends.

It seems unfortunate to grade children at such a young age on subjects they may never need so I’d like the curriculum to be updated.

The financial world is more complex than ever, yet we’re still not teaching our kids how to handle it.

We’re all able to buy shares in companies at a click of a button and make peer-to-peer lending investments via an ISA without a word of financial advice or education.

According to the OECD/ INFE 2016 Survey of Adult Financial Literacy, the UK scores almost exactly in line with the average of 30 countries when benchmarked against an internationally agreed set of questions.

This puts the UK 15th in the ranking against the 29 other countries that took part in the survey – just above Thailand and Albania, which are below the average for OECD countries, but below France, Norway and Austria.

In 2019, a financial capability survey of children, young people and their parents was repeated.

It found that overall, children had a reasonable grounding in knowledge and understanding about money.

They recognise some financial products and concepts, and know money

It’s reasonable for young adults to save and retire with a pension of £1million

has a value. Compared to the 2016 survey, fewer parents were setting rules around debt. However, it also found that 37% of children aged between seven and 17 save monthly, and 63% have a bank account of their own.

Children who never save were least likely to be confident in managing their money, the survey found.

Good financial habits are like manners and a balanced diet: you use them and benefit from them, or you ignore them completely.

It is very reasonable for a young adult venturing into the workplace to save and retire with a pension of over £1million – but if they are never shown how to do this, how do we expect them to achieve it? This isn’t just affecting retirement plans.

Research from the bank N26 found that about 9.5 million UK adults have suffered from mental health issues as a result of financial anxiety.

Almost one-third (32%) of those say they struggle to sleep at night.

Managing money is both a logical process of knowing what to do, and a behavioural habit you need to learn.

This is why I wrote The Money Plan and why I share my easy-to-follow tips both here and at warrenshute.com.

Control your money – don’t let your money control you.

For more financial information, search for The Money Planner podcast online.