The lack of financial education in the UK has become a topic of great discussion in the advice sector and it is also a big concern for the teaching community.
Digital wealth manager Nutmeg carried out a survey of 1,100 people, made up of Brits aged 16-19 (500), 21+ (500) and teachers (100).
It found that 60% of UK teachers believe students leave school with a poor level of financial understanding.
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 five out of 10 or lower.
Lisa Caplan, head of financial advice at 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.”
Lessons
International Adviser recently reported that just under half of Brits do not know where to go to access financial advice.
In the piece, Jason Porter, director of Blevins Franks Financial Management, said the lack of financial education provided in schools means “many people do not have a fundamental understanding of basic finances and the financial system in the UK”.
In the Nutmeg survey, 37% of the 16-19 year old students said they are not, or were not, taught finance at school.
Two-thirds (67%) of the age cohort said that if they had learnt more about personal finance at school they would have more confidence about their finances as an adult.
Caplan added: “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.”
Not working
However, Nutmeg research suggests that the current solution to financial education is still not having the necessary impact.
Under half (44%) of those exposed to financial education in schools feel like they could confidently manage financial products.
A third (34%) of 21+ adults said that lessons made no difference in how confident they feel in their financial decisions.
