Teaching Personal Finance In Schools: Empowering The Next Generation (2024)

I often asked myself whilst at school why personal finance was not in the curriculum. I asked one of my teachers why we do not learn about this topic and they could not give me a good explanation, their response was it is not up to us and we have no control over the curriculum. Naturally I was disappointed with the response and decided to educate myself about personal finance, so I began to learn during lockdown in regards to investing, pensions, credit scores, etc. I spent a prolonged period educating myself when many others have not, but this is not their fault. People from a young age are made to believe that investing and the stock market is too risky and complicated to understand but it can be made far more simple with a bit of time spent learning. There are various tools where people can learn to invest such as online forums, YouTube videos, etc. Although, the one place you would think personal finance would be taught is in schools but it is not. The education system has simply failed in this regard, everyone can acknowledge that personal finance is a crucial topic to learn about as it has such a significant impact on all of our lives, whether it be with our investing goals for retirement, getting on the property ladder, or simply saving up for that dream holiday. All of these things are affected by our knowledge of personal finance, especially in current times, after considering the UK's current economic state. Interest rates are extremely high standing at 5.25%, the highest it has been in the UK for sixteen years. The harsh reality is inflation is eating up people's money faster than they can use it. Now more than ever it is so important that we empower young individuals to gain control of their personal finances and futures. A variety of studies has revealed that individuals with a stronger understanding of financial literacy are more likely to own stocks and shares, have an emergency fund, or a retirement plan compared to those who are financially illiterate. For young people to be able to retire earlier they need to invest for themselves and not rely on the Government's state pension, which one day may cease to exist. The pension age keeps on rising making it far more difficult to enjoy an early retirement. I myself have already started investing into a stocks and shares ISA amongst other investing tools and began when I was eighteen, however many people my age are not aware of how to invest, how to start a private pension fund, etc. The Financial Times has stated that over 22 million people have an ISA, 14.9 million hold a cash ISA, 3.9 million own a stocks and shares ISA and 3.4 million have both. These stats may seem promising although I disagree, considering the amount of people who have access to an ISA this number is still far too low. The majority of people do not have an ISA because they either lack the required understanding, or are too worried about risk but we need to make young people understand that everything in life contains risk to some degree and with proper teaching and willingness to learn the risk can be managed and reduced by a significant scale. However not every type of ISA contains risk, such as a cash ISA which acts as a tax-free savings account where you can simply earn tax-free interest on your cash. Both a stocks and shares ISA and a cash ISA are great ways for young people to look after their personal finances whilst building wealth at the same time. According to the Money and Pension Service Organisation, in 2023 15% of the UK's adult population were categorised as being in debt. This is a worrying statistic and exacerbates the need to teach young people on how to correctly manage their funds so we can lower this figure.

The Government should ensure the education system place a significant importance on this topic. We cannot afford to fail anymore students. The whole idea of school is to make sure young people leave as responsible and capable young adults transitioning into adulthood. Learning topics that are not required in day to day life such as Pythagoras Theorem should not take priority over financial education. The whole idea of personal finance being missed out of the curriculum is a worrying thought for the future. Some teachers themselves are unaware of certain personal finance tools such as making use of an ISA (Individual Savings Account) or SIPP (Self-Invested Personal Pension), so how can we expect students to have an understanding at such a young age. If students were able to be taught personal finance during their education it would have an exceptionally positive impact on their lives as well as society's. We would be creating more confident, financially literate individuals who can comfortably navigate their own way in the personal finance world.

One major factor that is often not discussed enough is the toll of stress personal finance can bring. People often feel worried about money and it brings strain on people's mental health. The constant worry of finances can cause anxiety amongst other things. According to the Mental Health Organisation UK it was reported that one in three people (32%) felt worried about being able to pay bills and 20% of people felt worried about debt. These statistics are quite worrying considering the amount of people currently living in the UK. Students are stressed about their education as it is, we do not need to enhance that stress by allowing them to worry about money later on in life.

The Government can easily allow students to learn about this topic without having to spend a fortune on finance/business teachers just to cover this area. Instead they could simply allow schools to take a small portion of time a week whether it be in assemblies or morning tutor time to discuss personal finance. Teachers do not need to be experts to show YouTube videos from finance channels. It is free and simple to carry out but it would be extremely effective for young people. I myself have learnt from YouTube videos. It could be said why cannot students do what I did and learn themselves online, it is not an essential school subject to be covered. However, the issue with this is most young teenagers pan off the topic of personal finance, often saying I do not need to think about retirement, investing, or a mortgage I am still young. Most teenagers would rather learn about other things that are more important to them, but students need to be aware that personal finance is something to take seriously and think about. If you were to ask an adult if they have worries regarding money, a lot of people would respond with yes. Many adults are burdened by financial issues and often feel embarrassed when discussing money even with family and friends. Money should not been seen as a scary private matter because it just discourages young people from wanting to speak about money.

It is clear that if the Government do not allow the education system to adapt by including personal finance in the curriculum in some form it will have a negative effect on young people in the future. The teaching of personal finance provides the necessary skills for students to alleviate future worries regarding money and can enable them to start saving for that first house or dream retirement, we just need to teach them the correct skills. Schools do not even need to teach in-depth financial principles, just the basics so they have a foundation to work off of. Teaching the basics can allow students to cover topics such as what is a pension, what is a mortgage, what is an ISA, etc. Understanding personal finance can create lifelong healthy financial habits and elevates financial wellbeing. So I would urge any young person to research and learn about personal finance in their own time because it does not seem like personal finance will be added to the curriculum anytime soon.