The recent release of our 2020-21 Young Persons’ Money Index (YPMI) has uncovered valuable information about experiences of UK students and their relationship with money and personal finance.
It has also given an insight into how financial education impacts the way young people not only manage. but interact with money as they grow.
We look at the real importance of financial education as well as the positive benefits that these skills have on real young people and their development into adulthood.
What do young people need to know about money?
With the next generation of young people growing up in an age of digitalisation and COVID-19 economies, knowledge of topics such as inflation, house prices and investment are crucial to learn at a young age.
Stephanie Payne, our Relationship Manager in Financial Education, points out that having an awareness of debt, rates and where to go to gain support could make a real difference: “Having worked across both the North and South it is really important to me that all students regardless of background or postcode get those same opportunities and experiences.”
As young people plan their future, many of them will be thinking about going to university. Having a fully developed understanding of how (student) loans and the subsequent interest will work would form part of their decision.
This would help them decide whether they want to go to university, but also the steps that follow when it comes to repaying student loans. Our 2020-21 YPMI showed that whilst 88% of young people aged 17-18 planned to go to university, 26% of this same group did not understand how a student loan worked.
How can schools prepare students to manage their finances?
The need for financial education amongst adults is just as prominent as it is amongst young people. Recent research through our social media channels found that over 50% of adults wished they had learnt about debt and/or debt management whilst they were at school. 30% of adults also expressed that they wish they had learned about taxes.
This lack of accessibility to financial education in schools over the decades has left adults unprepared for their financial futures.
Payne points out, “It’s not just a qualification, it’s a life skill and one they will carry past our doors and into [their] futures”. These life skills will affect every major decision that a person will make throughout their life, from buying a house to contributing towards a pension.
The findings from our 2020-21 YPMI show that financial education is more important than ever, with 83% of students wanting to learn more about money finance in school.
How are LIBF supporting financial education?
We’ve always been passionate about driving financial education in schools and have campaigned to include it in the National Curriculum, as well as providing instantly accessible, free online resources.
Our range of qualifications, such as our Lessons in Financial Education (LIFE) are designed specifically to teach students about personal finance and financial management. Our Level 2 and 3 qualifications created for 14–16-year-olds are also available for teachers and allow students to achieve formal recognition, adding a further element of confidence to students’ development.
Check out our free financial education resources
Find out more about the Young Persons’ Money Index