Financial Education Gap: Majority of UK Children Lack Money Skills
Recent research study highlights a significant gap in the money skills of many youngsters.
Less than half of children and teenagers aged seven to 17 in the UK have received a meaningful financial education, highlighting a significant gap in their money skills that will impact their adult lives, according to the Money and Pensions Service (MaPS), a government-backed body.
The findings estimate that approximately 5.4 million children across the country lack the necessary financial knowledge.
The research conducted by Critical Research for MaPS involved over 4,700 children and young people aged seven to 17, along with their parents or carers.
The study revealed that children living in social housing, rural areas, and lower-income households were less likely to have received a meaningful financial education.
Additionally, children with parents or carers who had mental health conditions were found to be at a disadvantage compared to the UK average.
To determine the measure of meaningful financial education, the study assessed the percentages of young people who recalled receiving financial education at school that they considered useful. It also considered whether they received regular money from parents or work, with parents setting rules about money and involving them in spending decisions.
The report acknowledged the potential impact of the Covid-19 pandemic on the availability of meaningful financial education. Disruptions to education and daily life over the past three years may have limited opportunities for children to receive financial education at school or at home.
The findings indicated that only a third of children recalled learning about money at school and finding it useful, while nearly a quarter had received key elements of financial education at home.
Only 10% of respondents reported receiving both forms of education, highlighting a lack of "joined-up" financial education for children and young people.
The report also highlighted a discrepancy between age groups, with younger children aged seven to 11 less likely to have received a meaningful financial education compared to older children aged 16 to 17.
In terms of regional differences, children in Scotland were most likely to have received meaningful financial education, followed by Wales, England, and Northern Ireland.
MaPS, as part of its UK strategy for financial wellbeing, aims to have an additional two million children aged five to 17 receive meaningful financial education by 2030.
The organisation encourages parents to engage in conversations about money with their children, incorporating everyday experiences such as budgeting, food shopping, and part-time jobs. To assist parents, MaPS provides free resources like "talk learn do," an online tool that facilitates these conversations.
MaPS emphasises the need for collaboration between teachers, school leaders, and governors to deliver financial education effectively in classrooms. It also calls on financial services and funders, including charitable trusts, to increase their investment in the delivery of financial education.
Sarah Porretta, executive director at MaPS, expressed concern about the figures, highlighting the potential consequences of millions of children lacking financial education.
Porretta emphasised the importance of learning about money from a young age, as financial decisions have a significant impact on daily life and future outcomes.
She called for collective efforts from banks, building societies, foundations, financial institutions, parents, and schools to address the issue and equip the nation's children with essential money skills.