Financial knowledge and awareness can affect countless aspects of our lives, from being able to budget for our weekly food shop and pay bills, to meeting our mortgage payments and having enough money to live off during retirement.
So why are so few people receiving proper guidance and education on how to manage their finances? And what lasting impact can this have on a person?
According to research by Santander UK, just 38 per cent of children and young people have been given some form of financial education at school, while 44 per cent of adults feel they’d be in a better position to manage their money now if they’d been taught basic skills, such as household budgeting, at school or college.
But as the cost of living crisis bites, many people feel this lack of financial training and guidance has had a very real negative impact on their lives. For instance, the Santander UK research found that two-thirds of young people believe their lack of financial education has led to them falling into debt.
Meanwhile, a separate study by the Centre for Social Justice (CSJ), in partnership with Lowell, shows that 44 per cent of people believe more financial education would help to improve their financial situation.
In addition, the study found that more than two-thirds of 18- to 34-year-olds who’ve had financial problems believe this was caused partly by a lack of money management skills.
That clearly shows that people not only recognise the positive impact that proper financial education can have, but also yearn for it and would find it valuable.
Financial education was actually added to the national curriculum in secondary schools eight years ago, but research by the CSJ in collaboration with Lowell, has found that the impact of this has been limited.
In fact, two-thirds of teachers believe students have a poor level of financial understanding when they leave school. As a result, the CSJ and Lowell are calling for lessons in money management to be added to the primary school curriculum, so young people can get to grips with financial literacy much earlier on.
This, they believe, is crucial because children’s experiences of money will be very different by the time they start secondary school, depending on their socio-economic background. For instance, the report said children from low-income backgrounds will be less likely to be given pocket money, which means they’ll have fewer opportunities to learn how to save and develop good spending habits.
Furthermore, it pointed out that the move to a cashless society has also led to children having fewer opportunities to learn how to manage money properly, while those from less affluent backgrounds will also be less likely to have an online bank account.
Ultimately, this leads to millions of children and adults alike not feeling confident handling their money day-to-day, and going through life lacking the knowledge, skills and information to make important financial decisions.
As the argument over the provision of financial education continues, we should remind you that professional, regulated financial advisers are available to provide guidance and support, so you can take the steps you need to achieve your financial and lifestyle goals.
If you have any questions about managing your money, please don’t hesitate to get in touch with us.