UK demand for financial education highest in Europe

The demand for financial education in UK schools is the highest in Europe, according to a survey.

Research by the organisation Ipsos for banking group ING found that 88pc of adults in the UK said financial education should be taught in schools; the highest level of support of 12 European countries surveyed.

Demand for financial education in schools was lowest in France, at 63pc.

Financial education will become compulsory in schools across England for the first time next year, following its inclusion in the new curriculum.

Personal finance is already taught in schools in Wales, Scotland and Northern Ireland.

Tracey Bleakley, chief executive of Personal Finance Education Group (pfeg), said: “This research shows that the UK is leading Europe when it comes to demand for financial education – and we want to see it leading Europe when it comes to its supply as well.

“Financial education’s new place in the secondary National Curriculum from next September will make a huge difference, but is not enough on its own. We need to ensure that all schools – including primary schools, Academies and Free Schools – give their pupils the skills, knowledge and confidence they need to manage their money well.”

Despite being the strongest supporter of financial education in school, only 12pc of UK adults surveyed said they had been taught about money in class, lower than the weighted average of 13pc.

In contrast, a quarter of Austrians surveyed said they had received financial education lessons in school. However, the under-25s in Europe are much more likely to have received financial education at school than older age groups.

Almost 12,000 people in 12 countries were polled by Ipsos between April 18 and May 15 this year.

The Money Advice Service released research earlier this year which found that most children’s financial habits have already been formed by the time they reach seven years old.

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Teach the young to be cash smart

Financial education is joining the national curriculum next year, but it’s not just up to schools.

They may not be allowed to vote, drink or drive, but the UK’s under 18s are making important financial decisions and developing money habits, both good and bad, from a surprisingly young age – and without any formal money education.

As thousands trudge back to school after the summer break, they may not be guaranteed even the most basic guidance right now but financial skills will finally be incorporated into the national curriculum in 2014. Only time will tell if it encourages a more financially responsible generation.

So how can you give your children a head start?

Leading charity pfeg (the Personal Finance Education Group) has long been campaigning for financial education in schools, highlighting the dangerous gaps in the knowledge of young people.

The group has uncovered widespread misunderstanding of many basic principles of money management among 14-25 year olds.

Nearly half cannot interpret bank statements and the difference between being in credit and overdrawn, while more than one in four don’t know that a lower APR (annual percentage rate) is more attractive than a higher one when taking out credit, its research has found.

Research has also shown that adults exposed to financial education in school accumulate greater wealth and are more likely to save for retirement, therefore proving less of a burden on taxpayers in later life. The Centre for Economics and Business Research found that a lack of financial education is a huge drain on the wider economy, costing £3.4bn a year in debt, mis-sold financial products and issues such as unemployment and retirement provisions.

Financial education couldn’t be more relevant today – young adults have access to more forms of credit than their parents’ generation ever had and many will leave university with huge levels of debt.

The move to bring in financial education as part of the compulsory national curriculum, starting in September 2014 in England, is a crucial step. The new programme covers financial mathematics, while the decision-making aspects of finance will feature in citizenship lessons.

At key stage three children (ages 11-14) lessons will cover the functions and uses of money, the importance of personal budgeting, and managing risk. At key stage four (ages 14-16) lessons move on to cover income and expenditure, credit and debt, insurance, savings and pensions, as well as a range of other financial products and services.

Gove plans to change GCSE grading

Top GCSE marks of A* and A could be replaced by a one to four numerical scale, education secretary Michael Gove told MPs on Wednesday, as one option to distinguish between high achieving candidates and make a break with the previous grades awarded.

“Rather than having A*, A and B, you might have one, two, three, four, and it might be the case that one, two, three, four cover the band of achievement that is currently A* and A,” Gove told the Commons education select committee. Changing the marking scale “would help re-fix the level at which people could recognise outstanding behaviour,” he said.

Gove’s comments add some detail to the department for education’s desire to change the marking scheme as part of its reforms to GCSEs, although no decision has been made and consultation with exam standards regulator Ofqual would have to be taken into account. “As we have stated previously, the new more rigorous GCSEs will include more demanding assessment structures. Ofqual is considering how we can improve the current A* to G grading system. This is one option. Ofqual will be consulting on a range of options shortly,” a government source said.

Gove also announced that some plans for controversial reforms to the national curriculum and GCSEs could be watered down, as he acknowledged that criticism of the changes from teachers and experts was being taken into account. The education secretary told the Commons education select committee that he was considering scrapping plans for single, tougher, GCSE exams and that he might bow to arguments favouring retaining a tiered system with two exams aimed at pupils of different abilities.

“My overall instinct is to try and move away from tiering. But of course, I want to take a pragmatic approach,” he told the MPs. “If the strong advice, not just from [standards watchdog] Ofqual but also one of the awarding bodies, is that it would be easier to have more reliable assessment if you had some form of separation, then I will take that into account.” What form the second tier exam would take remained under consideration, with Gove suggesting that it could be altered to a stand-alone test with a lower-grade ceiling or be an extension paper. A climbdown over the issue means the department for education would avoid an embarrassing turf war with Ofqual, which has defended the use of tiered exams.

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