How to prepare the next generation to manage money

25 March, 2021Mutahara Gofur

compressed business-money-pink-coinsFinancial education empowers young people to deal with taxes, loans, mortgages and more. But many young people are still leaving school without personal finance skills and have to teach themselves how to manage their money.

Our Young Person’s Money Index (YPMI) 2021 report shows we have a clear responsibility to tackle the financial education gap. We look at what financial education the next generation needs and what LIBF is doing to help.

What does the current school curriculum look like?

When we first started managing our finances many of asked ourselves, "Why didn’t they teach us this at school?"

Financial education has been part of the school curriculum since 2014, when the government acknowledged that money management is a necessary skill. Since then, there has been some progress.

Our YPMI 2021 found that 64% of students said they have access to financial education compared to only 29% in 2015. Despite this, there is still a long way to go in bridging the gap in financial education.

The YPMI results also showed that 67% of students worry about money, with 83% wanting to learn more about money and finance in school. Young people are clearly interested in preparing properly for their financial future.

The financial education young people need and want

Schools must assess and evaluate the financial education content they teach, but also how it’s being delivered.

Of the 83% of young people who told the YPMI they want more financial education, 60% wanted it to be a separate subject. This highlights the need to make financial education a priority, outside of Maths and Personal, Social, Health and Economic (PSHE) education.

The gap in knowledge spreads over various financial topics:

  • 78% of students said they hadn’t received any information about tax in school, and
  • 37% did not know how a student loan works.

Furthermore, when asked what they wanted to learn, over 50% wanted to know more about:

  • financial products
  • budgeting
  • debt and its uses
  • essential and discretionary spending.

The facts speak for themselves – financial education is necessary to help young people gain financial independence and confidence.

Making the most of free resources

If you’re a teacher or a parent who wants to help your child learn about finances, there are plenty of free resources online.

Our free financial education resources include activities on how to manage different aspects of personal finance, including tax, savings, loans and borrowing.

The Money Advice Service and the Money Charity also offer resources.

How is LIBF filling the financial education gap?

We have always made financial education a priority and offer a suite of Level 2 and 3 qualifications for students in secondary schools. These teach young people how to manage money and also benefit from gaining qualifications that are equivalent to GCSE or A'Level.

However, we recognise that finding the time to offer financial education during teaching hours can be difficult. So our award-winning online programme, Lessons in Financial Education (LiFE), students to learn these vital skills in their own time, covering: 

  • spending and budgeting
  • insurance
  • borrowing
  • types of payment cards
  • using money abroad, and
  • routes into financial careers.

Students might access the course in tutor time, after-school clubs or other enrichment opportunities.

Although research shows young people want more financial education, it’s important to engage those who are less interested too. One way of doing this is with interactive lessons.

LiFE uses animation, games and music to teach personal finance. The online format is very accessible, makes financial education fun and caters for different learning styles.

Related content

Find out more about the Young Person's Money Index

See our free financial education resources

Find out more about the LiFE programme