Two thirds (60%) of UK teachers believe students leave school with a poor level of financial understanding, new research from Nutmeg, the UK’s largest digital wealth manager, has found.
The research found that the UK is rated below average when it comes to teaching finance in schools despite it being a mandatory part of the curriculum. In fact, 37% of students who are in the relevant age bracket for this curriculum said they aren’t or weren’t taught finance at school.
While three-quarters (74%) of teachers felt that financial education is as important or more important than non-core subjects like history and geography, 42% of them scored their own financial knowledge at 5 out of 10 or lower. Whether this is due to the curriculum, lack of resources or their own attitude towards finances is unclear, but teachers felt that their students were similarly struggling, with 60% believing that students leave school with a poor level of financial understanding.
Lisa Caplan, head of financial advice, Nutmeg, said: “At a time when personal debt in the UK is at record highs, pension pots are falling behind and mortgage and rent costs are rising, we need to be doing more to ensure young people aren’t left making big financial decisions without enough financial understanding. However, our research has found that students are leaving school with little financial literacy and a poor level of financial understanding.”
Two-thirds (67%) of pre-curriculum respondents agreed that if they’d learnt more about personal finance at school, they would have more confidence with their finances as an adult. However, Nutmeg research suggests that the current solution to financial education is still not having the necessary impact, with nearly half (44%) of those exposed to financial education in schools not knowing or not feeling like they could confidently manage financial products. And a third (34%) of post-curriculum respondents said that lessons made no difference in how confident they feel in their financial decisions.
Nutmeg has partnered with Young Enterprise to deliver and mentor students through a financial education in schools programme, designed to help students think differently about their finances and provide practical skills.
Russell Winnard, director of programmes and services, Young Enterprise and Young Money, said: “Young Money is proud to support educators to develop and embed high quality financial education to suit their educational setting. We do this by ensuring teachers and practitioners have access to training and resources which enable them to develop and deliver high quality financial education on a sustainable basis. This whole school approach is most evident in our Centres of Excellence programme – supporting schools to become beacons of good practice for financial education. We are really pleased to be working with Nutmeg to support a new Centre of Excellence, increasing the total number to over 160 throughout the UK.”
Caplan concluded: “We understand that there is a confidence crisis in the UK and financial education is important to help people make good quality, well-informed decisions that will make a difference to their future. This can be the difference between a smooth financial journey or sleepless nights, so we believe a real focus needs to be put on ensuring young people are receiving sufficient financial education.”
Nutmeg offers a guide to ISAs, pensions and lifetime ISAs, complete with a detailed unpacking of definitions, benefits, FAQs and much more. Both teachers and students can use these as useful aids to help bring confidence, understanding and a brighter financial future to future generations.
For more information visit: https://www.nutmeg.com/nutmegonomics/financial_education/