8th March, 2019
Bridging the Education Gap…
The world of financial planning is changing rapidly, which will present challenges to the next generation. Topical issues such as paying off student loans, buying your first home and starting a business from scratch are all common queries we receive from the children of our clients. This was a key motivation behind the recent launch of our iAspire proposition but has also made us realise how ill-informed school leavers are about the basics of finance.
Over the last few months, Oliver has been engaging with Newark Academy to build and implement a financial education programme for their students and we recently caught up with him to ask how it was going:
“I wish that I learned more about saving and debt when I was younger”
“Teaching young people about their finances is so important, I’ve never understood why you aren’t taught more about it at school”.
These are just two of the responses that represent a common reaction I’ve had from many more people when I’ve mentioned that we are engaging with Newark Academy to educate their pupils about personal finance. These views didn’t come as a surprise given recent research which showed;
- More than 4 in 10 UK consumers say that they are still negatively impacted by financial mistakes they made in the past; and
- 64% wish they had managed their finances differently; and
- Almost the same number (63%) wish they had learnt more about financial matters when they were younger*.
This research could suggest that the cost of financial advice is too much to bare for a large proportion of the population, but there is a strong argument to suggest that it is this group that require advice the most. We hope that instilling positive habits at a young age will go a long way to bridging this gap.
The key challenge when introducing youngsters to finance, is making sure the information we provide is relevant and engaging. The process has been challenging and has gone a long way to helping me understand why there isn’t currently anything in place. Initially, I had thought that the main reason would be the high cost vs. benefit, but the more I’ve progressed the programme, the more I’ve realised how tricky the task can be. For example, schools obviously have wide-ranging demographics and it is important not to alienate any particular group.
We have tried to be innovative with our approach to teaching some of the core principles, and we are hoping that the ‘Million Pound Drop’ style investment game we have created to highlight the benefits and risks of different types of saving vehicles will help bring a relatively dull subject to life. We’ve also used familiar objects to discuss bigger topics; showing the options when paying for a new mobile phone via different types of credit, the amounts you re-pay and the implications of not repaying, to grab their attention.
It’s fair to say that the process of creating an engaging presentation for a group of 14-17-year olds is as out of my comfort zone as it could possibly be. The proposed day later in 2019 certainly fills me with much more trepidation than my usual financial planning meetings to discuss retirement and tax planning! I look forward to reporting back later in the year how the day has gone; I am sure it will be as much of an education for me as it will be for the pupils!
*Research carried out in April 2017 by Censuswide, amongst a nationally representative sample of 2,166.