Personal finance should be taught in schools

Research from the Association of Investment Companies (AIC) among parents and teachers has revealed that nine out of ten parents and teachers (93% of both groups) think that personal finance education should be taught at school, and of these, half (50%) think it should be mandatory.

Currently, personal finance education is not compulsory and does not have to be included as part of the curriculum. Nearly half (45%) of parents think it is the joint responsibility of parents and teachers to educate their children on money matters.

When parents were asked to rank a range of school subjects in order of importance, parents placed personal finance sixth in a list, after the core subjects of maths, English, science, languages and history. It was rated more important than learning geography, music or religious studies.

Parents views on personal finance education

Over half of parents (51%) believe that personal finance education is vital, because they believe they would be in a healthier financial situation now if they had been taught about money matters at school. The vast majority of parents (90%) had no financial education when they were at school, and two thirds (65%) of parents would now like some sort of personal finance training as an adult, either to pass onto their children, or to sort out their own financial affairs.

Teachers views on personal finance education

Just four percent of the teachers surveyed regularly teach personal finance. If it were introduced as a new statutory subject, a quarter would be prepared to teach it at school, and another 57% would take it on as an additional subject only if they were provided with extra training. Of those teachers who do not want to teach personal financial education, 43% say they are prevented from taking on another subject by the amount of time they have, and nearly a quarter (23%) say that there are not enough funds available.

Annabel Brodie-Smith, Communications Director, AIC, said: “Parents are clearly worried about their children’s ability to manage their finances in the future and feel financial education is a crucial skill for adult life. Parents clearly believe that financial education should be part of the national curriculum, even rating it higher than geography and parents clearly feel they have missed out by not learning the basics, so it’s no wonder they want their children to be better prepared for the wider world. It’s obvious that parents want more financial information themselves so they are better informed and can pass on their knowledge to their children.”

Wendy Van den Hende, Chief Executive of pfeg (Personal Finance Education Group) is pleased that so many parents and teachers see personal finance education as a key priority:

“Personal finance education has come a long way.” she comments “Teachers are being actively encouraged to teach it and the government has pledged support to making it an even higher priority in the future – but there’s still a long way to go. pfeg is working with both primary and secondary schools to support teachers in planning and teaching personal finance but for it to be effective teachers and school leaders need to make a commitment to making it a regular and integrated part of the curriculum. This can seem daunting for already overworked teachers but it doesn’t need to be. pfeg supports teachers in making personal finance part of everyday lessons, making it both relevant and engaging for pupils. If more schools take up the opportunity to bring personal finance into the classroom we really will be preparing children for the complexities of managing their finances in the future.”

Julie Ward, Deputy Head Teacher, Aylsham High School, Norwich, said: “In today’s fast moving, quick-fix society, where many young people want everything immediately, there is an even greater need for financial education in our curriculum. Students see their parents paying for goods by credit card and cash comes out of a wall, painlessly! They need to begin to learn the value of money, this should happen at primary school, so by the time they reach secondary school age, making sound financial decisions become second nature.”

What should children be learning in financial education?

As part of their financial education, parents and teachers think their children should be learning about the following subjects, in order of importance:

Budget management
Mortgages/house buying process
Explanation of financial terms
How to obtain financial advice
Tax issues

There is a difference of opinion between parents and teachers with parents believing retirement planning should be a more important priority, in 4th place on the list, and teachers taking the view that debt management should also come in the top five.

Parents and teachers’ financial knowledge

The survey found that just 13% of parents and teachers (14% parents, 12% teachers) think their own financial knowledge is very good. Four out of ten (41%) also admitted their practical financial knowledge is good (36% parents, 44% teachers), but when it comes to investing or the stock market, they are stumped. A further third (36%) think their financial knowledge is just enough to get by and no more (35% parents, 36% teachers).

The subjects that parents and teachers feel they need to brush up the most on are:

Retirement planning
Tax issues
Managing budgets
Mortgages/house buying process
Investing for the long term in the stock market