Financial education has never been more important
What impact will the decision have on the pound, jobs and tax payments? The only thing that is clear is that financial education should be at the forefront of our minds now more than ever. In order to move closer towards a state of financial stability, it must be incorporated into everyday life. From the playground to the retirement home, people need access to knowledge that will help them to understand and improve their financial situation. Schools, universities and businesses have a huge role to play in making sure this support is available.
As a financial wellbeing company, we see young millennials regularly applying for loans. In fact, 40% of our customers are under 30 years old. This reflects the lack of quality financial education and support that was available to them at school and university. If young people had a better understanding of how to manage their finances, would they be filling out as many loan applications?
Compulsory in schools, why not at work?
Thankfully, steps have been taken by the government to improve the level of financial education children are receiving whilst they are at school and financial literacy education became part of the National Curriculum for UK based secondary schools in September 2014. A new parliamentary report has said that financial education lessons should become compulsory for even younger children, at primary school level. Six in ten teachers who took part in the study by the All-Parliamentary Group (APPG) said it would be ‘helpful’ if students arrived for the first year of secondary school with at least ‘some understanding’ of how to handle their finances. This is certainly a step in the right direction, but only time will tell whether this introduction will have an impact on how young people manage their finances in the future. In order for them to have the best possible chance, their financial education must continue well beyond school. It must be a constant part of their professional and personal life.
An individual’s ever changing circumstances means that it is crucial for financial education to continue after school. The needs of a student at university will completely different to a new home owner, or someone who is getting married or starting a family. An individual who has recently graduated needs to understand how they can most effectively, and quickly, pay off their student loan. A young professional needs to understand how to apply for a mortgage. A new parent needs access to information about payment during maternity leave and child benefits. What they learnt at primary or secondary school could be completely irrelevant at this point. This is why universities must provide their students with access to a financial education and businesses must do the same for their employees.
Financial wellbeing for all
Luckily, it seems as though businesses are starting to recognise the importance of financial wellness for employees. As a result, they are providing a route to financial education. In a 2016 study, conducted by REBA into employee wellbeing strategies, almost half (49.3%) of the wellness strategies surveyed included financial education and advice. Nearly a third (32.4%) of respondents (HR, rewards and benefits professionals) said that they were planning to add some form of financial education or support to their wellness strategies in 2016 and beyond. As long as the strategies on offer cater to people at all different stages of life, the UK can collectively move towards a more financially stable future for all.