Young Persons’ Money Index is another rallying cry for financial education

interactive investor comments on the latest Young Persons' Money Index published today by the London Institute of Banking & Finance.

• Of those surveyed by the London Institute of Banking & Finance, anxiety in young people about finance has increased to 81% from 67% last year.*
• 67% said that Covid-19 has made them feel more anxious about money. That rises to 73% among 15–16-year-olds. 
• Overall, 72% want to learn more about money and finance in school. That rises to 85% among 17–18-year-olds.

Commenting on the 2021-22 Young Persons' Money Index published today by the London Institute of Banking & Finance, Moira O’Neill, Head of Personal Finance, interactive investor, says: “It’s so hard to shield kids from money worries, as this research devastatingly highlights, and the cost of living crisis comes at a time when many young people’s anxiety levels are already heightened after two years of Covid. But teaching our children how to get on top of how to budget and manage debt could offer a beacon of hope.

“Today’s findings echo our campaigning at interactive investor to create a more robust framework for financial education in the UK. This is another rallying cry to the government and regulators to tackle the issue of financial literacy with the urgency it demands.

“Last year, together with the judges of the interactive investor Personal Finance Teacher of the Year Awards, we published an open letter to the Department of Education, asking for a series of crucial measures to help address the impact of a clear lack of financial capability in the UK. With the levelling-up agenda a long-term commitment, we continue to ask the government to give personal finance lessons the priority they deserve.

“It is paramount that our younger generations are learning about money early, to help build a healthy relationship with their finances which will see them through their adulthood. There is no better time to be calling for this than now. The cost of living continues to surge, and we need to equip our young people with all the tools and knowledge necessary to navigate this.

“Our rallying cry is especially important as we continue to recover from the last two years; the impact of the pandemic is still being felt economically as well as socially, and we can see in today’s findings that a huge proportion of young people feel even more anxious about their finances since the pandemic began.

“It’s encouraging to see that the latest Young Persons’ Money Index showcases the sheer demand for regular access to financial education in school. A staggering 71% of children surveyed said they want to learn more about personal finance at school – yet many children still do not have access to dedicated lessons on the topic.

“What also stood out to me was the fact that many 17–18-year-olds felt they were not getting enough access, but they are at a stage in life where they are preparing to leave school and go out into the world. Among those surveyed, only 15% cited school as their main source of financial education, and although that is a 7% increase on last year, it is still simply too low. A higher proportion - 25% - of respondents say they’re self-taught.

“At ii, we are preparing for the launch of our 2022 Personal Finance Teacher of the Year Award next month, which we designed to recognise teachers across the key stages who have actively sought to instil good financial knowhow among their pupils, awarding cash prizes to winning schools to help further fund their important efforts.

“Teaching children about money needs to be fun, engaging, and creative – why should learning about managing money be boring, when fundamentally – it is one of the most important life lessons, for all of us? Even little, regular, things can help.

“As the index reiterates, without this knowledge – kids are at real risk of getting into bad financial habits, and are especially vulnerable to scams and fraud. Financial scams remain incredibly prevalent, and this is something I have been, and will continue to be, vocal on. As part of our educational efforts, we should be warning younger people about the common pitfalls and traps that cunning fraudsters are increasingly using.

“There’s a lot more work to do in this space, and we need to move away from the idea that developing healthy financial habits is just something kids can ‘pick up on the way,’ and rather – understand that this is something we have a duty to install early on, and if we get it right, will ultimately benefit us all.”

*These statistics are fromtheLondon Institute of Banking & Finance.