Money is an integral part of our daily lives and a key driver for wellbeing, but managing money is not a topic we receive training for or are given a manual on how to navigate. Cost of living pressures are front of mind for many families right now, but people still find it tricky to start a conversation about money; in 2020, we found that 40% of people are keeping money secrets from loved ones. As a nation, we really don’t talk about money enough.
The Scale of the Issue
Financial wellbeing is about feeling secure and in control. It is knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future. But one in two adults (45%) in the UK don’t feel confident managing their money day to day and
11.5m have less than £100 in savings (The Financial Wellbeing Survey 2021).
These financial challenges are evident amongst young adults who have the lowest levels of financial confidence compared to other age groups. 58% do not feel confident managing their money; and that increases to 67% when it comes to not feeling confident planning for their financial future. Too many young people are entering adulthood without essential financial life skills.
Two Million More Children to Receive Meaningful Financial Education
Development of good financial capability requires financial education within the home, in the community and in school. However, only 48% of 7 to 17 year olds in the UK receive a meaningful financial education at home or in school. This means 5.3 million children and young people are not getting the vital learning they need. Here the measure of ‘meaningful’ financial education is a child/young person recalling learning about money at school and/ or receiving key elements of financial education at home. This is the national measure associated with the UK Strategy national goal to ensure 2 million more children receive a meaningful financial education by 2030.
The Role of Parents and the Home
Our insights show that the skills, knowledge, attitudes and behaviours that help people to manage money and achieve good financial wellbeing begin to develop from an early age, between the ages of three and seven (Money Advice Service; Whitebread and Bingham,2013).
The home is an important place to develop children’s financial capability but the role that parents and carers play often goes unrecognised. Parents and carers have a huge influence on children’s money skills, knowledge and habits as they provide the environment for children to observe, talk about and experience the use of money on a regular basis. Children are more likely to have stronger money skills when their parents talk about money, role-model financially capable behaviours and give their children responsibility for saving and spending decisions. What is more, talking with children about money not only helps children build healthy financial habits for later life, it can also help parents improve their own financial wellbeing.
Building Parental Confidence
Although parents have an important role, fewer than 3 in 5 (58%) feel confident talking to their children about money (Analysis of the 2019 UJ Children and Young People’s Financial Capability Survey). The challenge for many is not being aware that they should start early, and not knowing what to do or when to start these conversations, especially when they are not confident or in control of their own finances. They often have to deal with conflicting priorities, are time poor and, in many circumstances, reticent to approach the subject due to fear or guilt of doing so. This is exacerbated by a lack of existing provision aimed at supporting parents to help their children learn about money.
Our evidence-based financial capability programme for parents, Talk Learn Do, has demonstrated that embedding support within parenting services to help parents talk to their children about money can be effective in improving financial capability-related outcomes for children and parents.
There is a suite of evidence and interventions – developed by the Money and Pensions Service (MaPS) and stakeholders across the financial services, education and voluntary and community sectors – that tells us what works and provides tools to support parents to undertake this role. It is clear that action is needed to support parents to improve the financial wellbeing of children and young people across the UK, building the money skills and confidence that will last a lifetime.
Policymakers shaping parenting support, and funders and commissioners of parenting programmes, should include financial capability as a core outcome of their interventions. This should include helping parents talk to and teach their children about money and providing opportunities for families to learn together to strengthen their money skills. This could include embedding financial capability programmes such as Talk Learn Do as a module in existing provision and supporting practitioners to develop the skills to deliver it.
Organisations working with families should highlight parents’ role in supporting children to develop strong money skills for the future and signpost them to tips and tools that can help, including How to teach kids about money | MoneyHelper.
Where appropriate, all financial education programmes for children and young people should include activity that supports parents and carers to get involved and reinforce children’s learning.
By Sarah Porretta, Insights Director, Money and Pensions Service
Parents, Children and Adult Learning: Family Learning Policy in the 2020s
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- Focusing on Parents to Improve Social Mobility, Lee Elliot-Major, Professor of Social Mobility, University of Exeter
- Encouraging Parental Involvement in Children’s Learning Through School Communication, Adrian Burt, Founder, MarvellousMe
- Balancing Parental Support and Independence of 16-18 Year Olds in Further Education, Noni Csogor, Research and Policy Manager, Sixth Form Colleges Association
- Involving Parents and Guardians in Careers Support for 11-18 Year-Olds, Lesley Thain, Head of Career Programmes, Gatsby Foundation
- Enabling Parents to Get What They Need to Support Children to Learn, Kerry-Jane Packman, Executive Director, Parentkind
- Working with Parents in the Early Years to Get More Children School Ready, Louise Bazalgette, Deputy Director, Nesta
- Using Technology to Help Parents Bridge the Gap in Child Learning, Tom Harbour, Chief Executive, Learning with Parents
- Targeting Support at Carers to Improve the Educational Outcomes for Children in Care, Aoife O’Higgins , Director of Research, What Works for Children’s Social Care