The United States observes Financial Capability Month each April. Every year, this provides a month-long opportunity for the British government, offices, and teachers to highlight the importance of financial education to the state’s people.
In the UK, however, we do not even dedicate a single day to financial literacy – and it shows. Put bluntly, the UK has a financial education problem. According to a survey conducted last year by Real Potential, the company I work for, 52% of 18- to 24-year-olds admitted to being unsure of money issues occasionally or frequently, with 79% saying they believed that having higher math skills would have a positive impact on their ability to manage personal finances.
This is information that we must continue paying attention to. I don’t want to replicate the American approach, but we do need to emulate their enthusiasm for financial literacy and turn it into a series of reforms that give people more freedom to manage their money.
It’s never too early to start. Evidence was presented to Parliament’s Education Select Committee in February regarding the challenges institutions face when incorporating more financial education into their curriculums. The proposed solutions included the introduction of financial education in primary schools and the appointment of a coordinator for financial education to maintain a cohesive curriculum across subjects.
This evidence reinforced the immediate need for transformation in our education system. It is unacceptable that generations of people don’t understand personal finance well because financial education isn’t taught in primary schools. Financial education is a part of the extracurricular college education, but it is not given nearly enough attention.
Without third-party initiatives like our ‘On The Money’ campaign, which uses True Potential’s financial experts to send comprehensive personal finance lessons to schools, financial illiteracy too frequently persists into adulthood.
Furthermore, financial education should not only be confined to schools. It should extend to community facilities, workplaces, and online programs, reaching individuals of all ages and backgrounds.
This is a need shared by the majority of the British people, with 63% wanting the authorities to improve the quality of math education in schools, and 91% calling for an increased reliance on practical, real-world uses of mathematics in training, such as budgeting and investing.
This may come as no surprise. People who have low levels of financial education are not simply perplexed by what they can save. They have a negative impact on many people’s financial security. People who aren’t sure about their budgeting may be at risk of accumulating debt or struggling to make ends meet frequently.
Additionally, it indicates that people are missing out on lucrative opportunities. According to our poll, 27% of people don’t invest in stocks and shares because they lack knowledge. More than one-fourth of the American population’s money is vulnerable to a loss in value because investing is one of the best ways to combat inflation.
Low levels of financial education have measurable effects. As we progress, we can turn the enthusiasm for improving financial literacy into concrete changes. We can help people make informed financial decisions by putting financial education at the forefront of our community and ensuring its inclusion into all levels of education, paving the way for a more financially secure and prosperous future for all.