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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“Money” to be taught in schools – with a lesson on state spending

Financial education has been confirmed as an official part of the English national curriculum, including lessons on the public finances.

Children will be taught how to manage their money in schools for the first time in England, after financial education was included in the final version of the national curriculum.

The detail was published last night by the Department for Education and includes financial education in mathematics and citizenship education for secondary school pupils.

There have been further elements added since a draft curriculum earlier in the year opened to consultation, including lessons in how public money is raised and spent.

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

In Mathematics, “financial mathematics” is emphasised for the first time. Pupils will be asked to solve problems involving percentage change and simple interest, for example.

Pupils will learn to manage their money and plan for future financial decisions in citizenship classes, which will also include lessons in financial products and how public money is raised through measures like income tax, according to the published curriculum.

The curriculum will be rolled out across all government-funded, or maintained, schools, from September 2014.

Tracey Bleakley, pfeg chief executive, said: “It is especially welcome to see the link between personal finance and public finances restored to the final programmes of study for Citizenship education.

Young people lack financial skills

Young people are entering adult life with “dangerous gaps” in their financial knowledge, according to a new survey.

Under 25s are showing worrying gaps in their financial knowledge relating to bank statements, overdrafts and interest on loans, according to a new survey from Barclays and charity pfeg (Personal Finance Education Group) to mark the beginning of My Money Week, which runs June 3 to June 9.

Of those surveyed, 42pc could not interpret the difference between being in credit and overdrawn on a bank account statement, while more than a third did not know the correct meaning of APR in relation to interest charges on loans or credit cards.

Around one in eight (13pc) did not know what an overdraft was, with 8pc thinking it was a low-cost one-off loan from a bank.

Tracey Bleakley, pfeg chief executive, said: “It is clear that many young people are entering adult life with dangerous gaps in their financial knowledge that could lead them into serious financial difficulty.
“These findings underline the need for all schools to teach their pupils about personal finance, to equip them with the skills, knowledge and confidence they need to manage their money well.”

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

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

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

It published a report compiled by behaviour experts at Cambridge University, which found that most seven-year-olds have already grasped how to count out money and know that it is used to buy goods. They have also worked out what it means to earn money and what an income is.

Online education tools help improve financial literacy

A new study conducted in the US by Wells Fargo, in partnership with Visa, has shown dramatic improvements in financial literacy as a result of an early online education intervention. 

The study invited new college student credit cardholders to participate in an online education programme to increase awareness of building good credit. The programme, hosted on Visa’s ‘Practical Money Skills for Life’ website, consisted of two lessons and quizzes designed to improve the cardholders’ understanding of responsible borrowing and credit management and demonstrate the effects of this education on their credit behaviour.

The results showed that students who responded to the invitation and completed the lessons (3,563 in total) did remarkably better on a number of credit related metrics than those who did not, this included:

  •  51.2% less likely to file for bankruptcy
  • 45.1% less likely to be 60 days past due date
  • 22.8% less likely to have late fee accounts
  • 20% fewer revolving monthly balances (even though use of credit cards increased)

Providing learners with online education environments, especially ones that include games, other competitive opportunities and potential interactions with peers are increasingly being used by financial institutions to help increase knowledge, build skills and encourage responsible financial behaviour. One example being used extensively across the UK is Nationwide Building Society’s ‘Nationwide Education’ personal finance programme for ages 4 to 18+.

Read the full report and visit Nationwide Education.

Nicki, Business Director, dbda

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