To mark Talk Money Week, online investment platform Wealthify explores the critical role financial education plays in creating more open dialogue about money.
This week marks Talk Money Week, which aims to inspire more frank and open conversations about all aspects of finance. Building conversations about money into our everyday lives is essential to growing financial confidence and resilience, as well as creating healthy money habits.
Despite the existing financial education framework in UK schools arguably not being up to scratch, fostering this dialogue about money needs to start at an early age — specifically in the classroom.
Our recent research shows that 16 to 18-year-olds have the lowest level of financial understanding of the range of age groups surveyed, which was those aged 16 and above. To tackle this – and ultimately improve financial literacy amongst this demographic – we’ve partnered with financial education charity, Young Enterprise, to launch Future Skills: a campaign providing free resources to help teachers equip 16 to 18-year-olds with “essential money skills”.
Working with independent economic think tank, The Centre for Economics and Business Research (CEBR), we developed a barometer to measure levels of financial literacy across the country. The proprietary model was designed to measure people’s understanding of 10 common financial topics, such as inflation, taxes, pensions, and savings. Our research found that only 5% of the country could answer all 10 questions correctly. Young people on the cusp of financial independence (aged 16 to 18) could only answer two out of 10 questions correctly.
Child Trust Funds
Our Future Skills campaign is timed to coincide with the maturation of Child Trust Funds (CTFs). Over the next seven years, more than six million UK children will gain access to a Government-funded Child Trust Fund — worth an average of £2,100 when they turn 18. However, less than half of children aged 16-18 (49%) are aware of CTFs, with the Public Accounts Committee estimating that over £1.7bn’s worth currently remains unclaimed.
Launched by the Labour government in 2005, Child Trust Funds were opened for children born in the UK between 1 September 2002 and 2 January 2011. The first children eligible to claim a CTF turned 18 in September 2020, with many thousands more doing so over the next six years. However, awareness of CTFs is very low, with 1.3 million1 (58%) 16 to 18-year-olds saying they don’t know how to claim theirs — and one in four (25%) describing their understanding of the eligibility criteria as ‘poor’.
Barriers to financial education
While developing Future Skills, we surveyed and interviewed over 100 UK teachers of 16 to 18-year-olds to understand the barriers they face in teaching financial education. The key issues flagged by teachers were lack of time and resources, and a low level of understanding of most financial education topics amongst students — including basics such as budgeting, saving, credit, and banking. Teachers also said they lack confidence helping young people plan for the future (65%), delivering engaging financial education activities (69%), and teaching responsible attitudes to saving (69%). Fewer than one in five (15%) teachers had taught students about Child Trust Funds, and there was uncertainty amongst most teachers about the importance of the topic (65%).
This all clearly shows that financial education is not where it should be, particularly for 16–18-year-olds who are about to become financially independent in a tough economic environment.
Despite financial education being on the secondary school national curriculum for nearly ten years, too many teachers are telling us that they don’t have the time or resources to teach it. As a result, many young people are leaving education without the essential financial skills they need.
Future Skills campaign
That’s why our Future Skills campaign provides free resources to help teachers equip 16 to 18-year-olds with essential skills, just as they approach financial independence.
The campaign enlists the help of viral TikTok sensations, Kyron Hamilton and Maddie Grace Jepson, who co-star in the four-part educational video series. Designed specially to engage young people with financial education topics based on insight shared by teachers, Future Skills’ teaching resources lead with Child Trust Funds, with Kyron and Maddie explaining to young people what they are and how to find yours.
The aim is to use the CTF as a moment to encourage young people to actively engage with their finances, by thinking about what they might do with that money once it’s in their hands. A prize draw2 (one running each school term and worth the same as the average matured CTF) has also been launched by Wealthify to give all 16-18 year olds a chance to get their hands on some money to kickstart their financial independence.
The comprehensive teaching materials are video-led, with accompanying PowerPoints, lesson plans, worksheets, and digital activities for the students to complete. All can be accessed via the Future Skills hub, which can be found here.
Our mission is to improve the overall financial health of the UK, by making sure every young person reaches financial maturity with the confidence, knowledge, and tools they need for a healthy financial future.
Andy Russell, CEO, Wealthify
If you have a child who might be eligible for a Child Trust Fund, more details about how to find it can be found at Wealthify.
1 The estimated population of 16–18-year-olds is 2.3 million. 58% of this equates to 1.3 million.
2There will be three prize draws to win £2,100, one per school term. Entrants can only enter one of the three draws. Closing dates for the draws are at 23:59 on 11th of December 2023, 25th March 2024 and 15th July 2024. Entrants must be aged 16-18 at the time of entry. Terms and conditions apply.
