This article is the latest part of the FT’s Financial Education and Inclusion Campaign
It’s the pre-lunch session at University Technical College Heathrow, and a class of seniors is learning about risk and reward.
The students are lively and engaging, discussing whether mortgage holders really own their homes, the risks of bitcoin trading, and the ethics of gambling. The lessons are not just academic: many of the 16 and 17-year-olds have part-time jobs, and some are already thinking about training opportunities or student loans.
“We are from a . . . Dude to learn about it — learn how to save, invest, and not spend recklessly,” said Myron Mascarenhas, who has traded and even mined Bitcoin in the past. “We need the money – we have to save for what we want.”
UTC students aren’t the only ones who want to learn about money matters. With the launch of its Financial Literacy and Inclusion Campaign last year, the Financial Times aims to democratize financial literacy with free, engaging content for young people across the UK.
“At FLIC, we want to help young people deal with the realities of today’s everyday life – from protection against crypto fraud to the fact that it is much more difficult for this generation to find affordable housing,” said Aimée Allam, Managing Director of FT FLIC.
Although financial education in UK schools has improved, there is still a long way to go as teachers point to persistent obstacles.
According to a 2021 survey by the London Institute of Banking and Finance, almost three-quarters of 15-18 year olds said they wanted to learn more about money management in class. But only 15 percent of the 2,000 students surveyed said school was their most important source of financial literacy.
According to a cross-party parliamentary group working on the issue, financial literacy in the UK is “patchy” with many exposed to money from a young age but unequipped to deal with it.
“That’s probably one of the things they ask about the most,” said UTC teacher Louise Kelsh. There is a gap in understanding in her classroom as the students are way ahead of the teachers in areas like cryptocurrency but lack knowledge of more mundane aspects of money management.
Sharon Davies, chief executive of education and employability charity Young Enterprise, said teacher trust, lack of access to support and training and a lack of incentives meant financial education fell off the curriculum.
“Teachers are under a lot of pressure, so putting it in the curriculum isn’t enough,” she said. The subject is not part of the compulsory curriculum in English primary schools, but has been in secondary schools since 2014.
The Money Charity, which focuses on helping money management, described its inclusion as a “pyrrhic victory”. Financial matters are still not consistently taught due to a lack of “resources, teacher training and prioritization”.
Mark Fawcett, founder of We Are Futures, a branding agency that connects businesses and schools, said greater accountability in educational institutions could improve the situation. He suggested including financial education in school inspections and holding teachers accountable when they don’t focus on it.
But educators insist supportive measures—the carrot rather than the stick—are more effective. Government funding of schools in England has fallen in real terms over the past decade and will not return to pre-austerity levels until next year, according to the Institute for Fiscal Studies.
That would put budgets under pressure even as schools face additional demands to help children catch up on lost learning and thrive emotionally and socially after years of lockdown due to the coronavirus pandemic.
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According to a study by survey app Teacher Tapp, 63 percent of teachers said lack of time was the top barrier to creating a financial education program. Training is also a problem: 13 percent named a lack of professional competence as the main obstacle.
“We tend to get more and more shoveled into the responsibilities of schools overall without taking anything out,” Fawcett said.
This, he added, has hit disadvantaged children disproportionately because the schools they attend tend to be overwhelmed. “Children from families who have the most constant financial problems receive a one-hour lesson from a PSHE [personal social health and economic] Teacher who may not be trained in the subject.”
At UTC, a focus on professional learning underscores the importance of financial literacy. For teachers who are pressed for time, Kelsh says teaching tools make a big difference. Last week, students learned about interest, debt and gambling in classes at the banking group NatWest.
“For many teachers [reluctance to teach finance is down to] a lack of confidence in teaching something they don’t think they’re good at themselves,” said Caroline Edwards, financial capability lead at the bank.
However, not all resources are created equal, and experts like Davies cautioned that it’s sometimes difficult to decide what to teach when you have materials but no guidance on how to use them. “We need to label the quality of these products,” she said.
That’s partly why the FT launched its own charity last year, the Financial Literacy and Inclusion Campaign, to share access to trustworthy financial education.
“A critical element of young people’s financial literacy is the ability to recognize when they are being spoken to. Financial literacy should be for everyone, not just potential clients,” said FLIC’s Allam.
According to a survey by financial advisors, a lack of financial literacy can deepen inequalities, as wealthier households tend to have more time and resources to teach children about money. Research from St. James’s Place found that teenagers from wealthier backgrounds perform better on tests of financial literacy than their peers from lower-income households.
Discovering the influence of background on education while teaching, Tom Harbor founded the charity Learning With Parents to help families learn about school subjects together.
“Schools have to do so much, they’re the social workers, they’re the core curriculum providers and they’re everything else,” he said. “Things like teaching financial literacy are always going to fall down the list.”
At UTC Heathrow, students believe that financial literacy action cannot come soon enough.
“When we’re young, it’s very easy to believe that we have this money and we’re going to keep getting it,” said Foad Hussein, who saves 75 percent of the money from his parents and part-time work in anticipation of becoming financially independent himself .
“But . . . it won’t stay like this forever. You’ll have to start paying for stuff soon, and it’ll hit you when you move out.”
Join FT FLIC online webinar on Monday 12 December at 13.00-14.00 UK time: Young, Gifted and Broke: a young people’s guide to coping with the cost of living crisis.
Letters in response to this article:
Knowing about money is less urgent than making it / By Caitlin Kelly, Tarrytown, NY, USA
Britain needs new ways to deliver financial education / By John Hunter, Orpington, Kent, UK