By Sharon Davies, CEO of Young Enterprise Thinking and talking about finances can be stressful and confusing, especially for young people. Financial education, however, has the potential to transform lives and also benefit the wider economy. The challenge The rising cost of living, coupled with a weak Pound and political and economic uncertainty, has increased […]
By Sharon Davies, CEO of Young Enterprise
Thinking and talking about finances can be stressful and confusing, especially for young people. Financial education, however, has the potential to transform lives and also benefit the wider economy.
The challenge
The rising cost of living, coupled with a weak Pound and political and economic uncertainty, has increased many people’s worries around money. More than half of adults have experienced anxiety, and a quarter felt depression because of rising bills, according to a new survey by the Personal Finance Society.
This also affects children, with 67 per cent of young people reporting that they do not feel confident about their financial futures and 6 out of 10 feeling that the Covid pandemic has made them more anxious about money.
The level of financial capability in the UK is currently not where it should be. A recent survey of 2,000 UK adults showed that almost half of adults cannot pass a basic financial knowledge test around key areas, including savings, investments, and retirement.
The combined pressures of the pandemic, poor financial capability and increased use of social media mean that young people are more vulnerable than ever to online scams. They risk being drawn into ‘get rich quick schemes’, wrongly believing that brands and influencers with large social media followings are credible.
With young people being given false hopes of lucrative profits so readily online, there’s a lot of misinformation that could influence children.
This is why financial education can play such an important role in helping young people to stay safe online. It can also help them to make decisions about money confidently and carefully.
The importance of financial education
Research has found that children begin to form their mindset around money habits between the ages of three and seven. So it’s essential to educate children about money in practical, real, and relevant ways, starting when they are in primary school. However, at the moment, only one in three primary-aged children receive any form of financial education.
Young people are growing up in a changing social and financial environment. We only need to look at the pace at which the world is becoming cashless. Investment opportunities such as stocks and shares and cryptocurrencies are available to young people at the push of a button.
Increasing access to practical, real world based educational opportunities for the next generation of employees and entrepreneurs is also good for wider society. Financial education enables people to maximise their potential, set up businesses, embrace opportunities and ensure the country is ready to thrive again when the economic downturn comes to an end.
What should be done?
It’s vital that the UK government prioritises financial education, so every child has the opportunity to develop their financial capability.
Educators, policymakers and parents can help to ensure that the next generation is equipped with the knowledge to identify the rights and wrongs of finance, and feel comfortable discussing money and asking questions.
This starts by educating children at primary school, when they are forming their mindset with money. Although financial education is on the national curriculum for secondary school students, it is not taught as a matter to primary school pupils. However, it is never too early to start.
At Young Enterprise, we work with young people, educators, and parents to help young people learn how to earn and manage their money and equip them with key employability skills.
Through our programmes, we make financial conversations engaging, relatable and practical. This helps young people to make stronger links between what they learn and how they can transfer that learning to their own lives. This view was confirmed in a recent survey by Young Enterprise which found that 96% of teachers agree that being able to apply learning in real-world contexts is essential for a brighter future.
Final thoughts
Financial concerns can significantly affect our mental and physical wellbeing. It isn’t enough to highlight the financial challenges young people will face. We must work together to equip more young people with the skills they need to better plan and manage their future finances.
