A petition has been launched by children’s money management app GoHenry asking that financial education be made compulsory in all schools from primary age. The app’s co-founder and CEO says current maths education does not teach kids the money management skills they need in the real world.
As of Tuesday, the petition has gained nearly 3000 signatures, but would need to reach 100,000 to be considered for debate in parliament.
Financial and enterprise education
The issue of financial literacy, or the lack of it, in the British population at large has been raised by both public and private sector actors.
The government first integrated financial and enterprise education into the curriculum in 2014 for state secondary schools. Components include the functions and uses of money, the importance and practice of budgeting, managing risk, income and expenditure, credit and debt, insurance, savings and pensions, financial products and services, and how public money is raised and spent.
The government also recommended teaching primary school age children about the concept of money and the risks of gambling, among other things, though this remains at the discretion of the institution.
PwC runs courses at certain schools, and offers free toolkits for parents to use at home.
“Numeracy skills are vital both in the workplace and everyday life, but we would like to see the Government prioritising the practical skills children need to navigate real-world finance successfully.”Louise Hill, Co-founder & CEO, GoHenry
The lifetime impact of low financial literacy is striking. Some 79% of adults who didn’t receive financial education have fallen behind on utility bills or council tax payments over the last six months, GoHenry says, while nearly half (46%) of those who didn’t receive any financial education as a child are earning under £15,000 per year, less than half of the national average income.
In a recent poll conducted by insurance company Shepherds Friendly, just 27% of Brits could answer half of the questions in a financial literacy test correctly. The pass rate was just 17% for 18-24 year olds.
Role for government
“Numeracy skills are vital both in the workplace and everyday life, but we would like to see the Government prioritising the practical skills children need to navigate real-world finance successfully,” Louise Hill, the app’s Co-founder and CEO, says. “If the Prime Minister is serious about reimagining our approach to numeracy, this is the change that will make the most tangible difference.”
British Prime Minister Rishi Sunak said earlier this year strong numeracy skills should be held in higher regard. “We have to fundamentally change our education system so it gives our young people the knowledge and skills they need – and that our businesses need – to compete with the best in the world,” he said.
GoHenry says delivering effective financial education needs to be a collaborative effort, with government, charities and industry players all playing a part and ensuring teachers have access to the right resources. “I don’t know a single Parliamentarian, from any party, who is opposed to the idea of giving young people a proper programme of financial education,” Peter Gibson, Conservative MP for Darlington, said.
It is hoped robotic financial advisers could fill the void for those who can’t afford or for whatever reason cannot access a private financial adviser. But these systems are still viewed flawed and untrustworthy. According to a CNBC survey, a third of consumers wouldn’t trust an AI financial adviser.
Regulators have stepped up efforts to protect consumers, most notably with the recently enacted Consumer Duty. The FCA said that in 2022, 12.9 million UK adults (24%) had low financial resilience. These are people who are in financial difficulty, or who could quickly find themselves in difficulty if they suffer a financial shock, because, for example, they have little to no savings or are heavily burdened by their domestic bills or credit commitments.