Over a decade ago, the UK set up its Dormant Assets Scheme, putting assets in unused accounts to good use. Dominic Vallier, Business Development Director in our Financial Education team, tells us why he believes the Government should use some of this money to teach young people about managing their personal finances.
If you haven't used a bank account for many years, it may be classed as a 'dormant asset'.
The term applies to forgotten financial products – such as current and savings accounts – which a bank, building society or other provider hasn't reunited with the account holder.
What is the Dormant Assets Scheme?
Led by industry and backed by the government, the Dormant Assets Scheme tries to reunite people with their cash. But if that's not possible, financial providers can transfer funds voluntarily from unused accounts.
Since it was set up, the Dormant Assets Scheme has enabled over £892m to be released in this way.
That money has funded work to tackle social and environmental challenges. And because the funding is long-term and flexible, it enables expert organisations to plan and strategise, which makes it all the more valuable.
Could this money fund financial education?
The Government will soon be closing a consultation on what to use the next tranche of dormant assets for. As a part of the Youth Financial Capability Group, we're calling for some of this money to fund financial education for young people.
This should be simple, as Financial Inclusion and Youth are two of the three existing priorities stated in the scheme.
However, so far financial education hasn’t yet benefitted from Dormant Assets Scheme funding – despite the growing need for, and demand from, young people to learn more about money.
Why young people need to learn about money
Our research shows that the number of young people worrying about money has increased to its highest level since we first started consulting young people about their attitudes to money.
According to our latest annual Young Person's Money Index, 81% of young people feel anxious about money and finance.
An overwhelming majority, 72% say they want to learn more about money and finance in school – a figure that rises to 85% among 17–18 year olds.
We know also that money worries have an impact on mental wellbeing. Research from the Money and Mental Health Policy Institute proves the link between money problems and poor mental health.
The value of financial education
By teaching our young people how to manage their personal finances, we’re equipping them to make positive choices that lead to happier lives. We know from some of those who’ve benefitted from our financial education courses, that learning to manage money can even change lives.
Binta Darboe is an analyst at Goldman Sachs who started learning about finance at school from studying our Level 3 Diploma in Financial Studies (DipFS).
“One of the most important things I learned was how taxes work and how to get a mortgage,” she says. “It helped me shape my financial goals and taught me skills I could apply in the future.”
From the other side of the desk, Helen Westwood has been involved with teaching financial education to young people since 2004. She’ s a Financial Wellbeing Consultant for The Money Charity and was Moneywise’s 2019 Personal Finance Teacher of the year.
She says that telling students about the “fantastically ill-informed decisions” she’s made with money makes great material for lessons.
That’s because we’re all human, and if we don’t know how to manage money we make mistakes – mistakes that Helen is happy for her students to learn from.
"I believe an informed understanding of financial matters is the foundation to a happy and successful future,” she says, “regardless of the size of an individual’s income."
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