The education headlines were dominated last week by the news that financial capability is to be built into the National Curriculum for the first time, following the release by the Department for Education of the new draft National Curriculum for England.
Financial education will be embedded in both mathematics and Citizenship education.
In the new programme of study pupils studying ‘citizenship’ at key stage 3 (aged 11-14) will be taught the functions and uses of money, the importance of personal budgeting, money management and a range of financial products and services.
At key stage 4 (aged 14-16) they will learn about wages, taxes, credit, debt, financial risk and a range of more sophisticated products and services. The new curriculum also puts a ‘renewed emphasis’ on mathematics, including financial mathematics.
Managing personal finances is an essential life skill so I am delighted that it is finally on the curriculum, and applaud the successful campaign led in Westminster by the All Party Parliamentary Group (APPG) on Financial Education for Young People, chaired by Justin Tomlinson, MP for North Swindon.
However, while celebrating these achievements and the recognition of financial education in the school curriculum we must not forget that there is a generation not covered by these planned changes.
Young adults have a challenging future ahead of them as a result of a double-dip recession and various factors such as an absence of free education, increasing housing costs, and the difficulty of finding secure employment.
Yet in the face of this many individuals have had no formal financial education.
The report from the Centre for the Study of Financial Education ‘Generation Y: the (modern) world of personal finance’ found from its surveys that nearly two thirds (64%) of the 18-25 age group have had no financial capability education.
This lack of education can impact negatively on young people by making them feel more fearful or intimidated about money than they might otherwise be, the kind of emotional response that at its worst can inhibit them from seeking out financial support when they most need it, and make them more susceptible to reach for quick-fix solutions such as payday loans.
Over a quarter (26%) of young people participating in CSFI’s report described their financial situation as “intimidating”. Meanwhile, over half (52%) aged 18-30 in Skandia’s ‘Growing Pains’ report say they feel financially insecure.
In the Institute for Public Policy Research’s report on 18-29 year olds ‘Young People and Savings’, nearly six in ten (59%) feel that even if they work hard they will always worry about money.
Encouragingly though, many in the age group recognise that financial education helps to address this fear and insecurity and replace it with a sense of control and confidence.
As one contributor to the ‘Generation Y’ report says “Improving financial literacy among consumers would increase confidence in financial services and managing money; there would be less of the fear which surrounds money and personal finance.”
Another adds “I feel that financial education is very important especially at the point where you are expected to start making important financial decisions.”
The comments show that, though some might see finances as uninteresting (17% from the ‘Generation Y’ report found the topic “boring”), a large proportion of young people recognise the positive experience and the urgent need of having financial education.
This is also evident when looking at comments from FE students who have taken part in the financial education programmes that the Skills Academy delivers.
A student from last year’s Barclays Money Skills ‘weeks’ programme said: “What really inspired me about the tutorials was the idea of being creative with money, as I’m quite creative in other areas of my life.
Money seems to be quite a boring thing for some people, but having to use creativity to put cheap meals together or sourcing the best deals on luxury items can be quite exciting. It’s very important to be financially stable, as it gives you a sense of confidence about the future.”
Now in its third year, Barclays Money Skills ‘weeks’ is a money management programme delivered by the Skills Academy, in partnership with Barclays.
It has been designed to strengthen further education students’ financial skills, knowledge and confidence, reduce their financial stress and increase their chances of achieving their goals.
FE colleges deliver fun, engaging money management activities in their college over the course of a week between February and the end of April.
If your college isn’t yet registered for Barclays Money Skills ‘weeks’ there is still time to participate in the 2013 programme.
Get your college involved in Barclays Money Skills ‘weeks’ and help young adults that didn’t receive financial education at school to take control of their finances so that they have the skills to navigate any challenging circumstances they might meet in their future.
Sylvia Perrins is chief executive of the National Skills Academy for Financial Services
For more information about our financial education programmes including Barclays Money Skills ‘weeks’ call the National Skills Academy for Financial Services on 0845 618 2353 or visit www.nsafs.co.uk