One in five are also unable to answer basic questions on savings and investment correctly, while nine million are already in critical debt, according to the Money and Pensions Service. And yet, we continue to treat financial education as a nice-to-have rather than a necessity.
But why does it matter when phone calculators, Google and artificial intelligence (AI) are so readily accessible now? Well, as Global Money Week seeks to prioritise, it’s not just about getting easy answers. Rather, it’s about developing healthy, long-term financial habits, confidence and a positive mindset towards money.
Britain has one of the lowest rates of financial literacy compared to similarly advanced economies. And this isn’t just important for the population – research indicates prioritising financial education would add an extra £6.98bn into the UK economy each year, adding up to £202bn by 2050.
Compared to other nations, Britain is falling behind. Finland and France, for example, are aiming to have the most financially literate populations in the world by 2030.
Since 2016, France has adopted a national financial education strategy led by the Banque de France. As part of this, they coordinate the efforts of institutions, associations and professionals to improve economic, financial and budgeting skills among the population – ranging from school students to pensioners.
How life insurance can benefit your health and wellbeing over the decades
Sponsored by Post Office
Following in the footsteps of European models
Finland also offers the award-winning Yrityskylä programme, which offers young people work and entrepreneurship experiences.
Finland and France are aiming high to have the world’s best financial literacy by 2030. Shouldn’t the UK be just as ambitious?
In England, there is still no statutory requirement to teach personal finance education in primary schools, despite the fact that money habits are formed as early as age seven. In secondary schools, it does appear on the curriculum, but only a small majority of schools actually implement it.
Without this, young people must rely on their parent or guardian’s own grasp of finance, or a teacher with the time and confidence to go beyond the curriculum. This tends to result in patchy, unequal levels of understanding across the population.
Even when schools do cover the topic, it’s often not engaging or relevant enough. Some teachers don’t feel equipped. Many parents feel unsure on how to talk about money at home.
The UK does have a National Strategy for Financial Wellbeing, launched in 2020, and one of its five goals is to increase financial education. However, the key to unlocking progress in this area is a higher level of ambition – one that the UK Government wholeheartedly champions. This includes creating a clear link between the benefits of financial education for economic prosperity at both a national and household level, so that the social and economic benefits are realised.
As is evident in the examples from Finland and France, structured collaboration across the board is also essential to embedding financial education nationwide.
The solution: aim higher, together
We need to take part in the OECD’s PISA study to understand current levels of literacy, how we rank against other nations, and where and how we can improve. The Department for Education and Ofsted need to raise the profile of financial education, and all teachers need to have accredited training and easy access to high-quality resources.
Businesses must also support their communities by offering work experience, visiting local schools, or even by funding charities such as Young Enterprise. And finally, we need parents to feel comfortable helping their children learn at home.
Only when responsibility is taken throughout the nation’s institutions can financial literacy begin to thrive in the UK.
Adults who didn’t receive financial education are less likely to save and more likely to fall into debt, with 79% saying that they have been behind on energy bills or council tax payments over the last six months. Comparatively, people who did receive financial education as children are saving, on average, 44% more into their pension pots each month compared to those who did not.
We know that not all secondary schools deliver financial education, even though it’s on the curriculum. However, it seems that even if young people have been educated, they do not always remember it, suggesting that financial education either doesn’t exist, or when it does, it’s either not engaging or not comprehensive enough.
As such, I applaud initiatives like Global Money Week, as it represents positive steps to draw attention to the requirement for better financial literacy. However, I also recognise that this issue requires more than just one week. It requires real action – cross-sector collaboration, cross-country learnings – to improve things for young people across the nation.
Let’s aim higher.
Sarah Porretta is CEO of Young Enterprise
