22nd October 2015
Young people are being thrown into the real world without knowledge of how to manage their money, with the vast majority, at 90% saying school has not taught them enough about the life skills needed in the real world.
The study of 1,500 school leavers and 400 teachers comes from Shares4schools.org, a financial skills programme from broker The Share Centre.
It found simple financial terms such as investing, credit cards and mortgages have been overlooked in the classroom.
The analysis found that seven in 10, or 71%, also said that they were not taught about a number of simple financial terms.
Worryingly, those at the front of the classroom agree, as 81% of teachers admitted that they too were not taught enough about managing money when they were at school, leaving them with one hand tied behind their back when it comes to teaching their own students.
The study, which investigated a range of life skills from what the stock market is to how a debit card works, found that 70% of school leavers felt they came away from school knowing nothing about money related real life issues.
The topic they felt most clued up on was how a debit card worked, with 11% saying they learnt about this at school. But only 9%, said they were taught about taxes while just 7% said they learned what a mortgage is and what APR means.
The findings come as Citizens Advice has found that the same age group (17-24) is facing stifling levels of debt from borrowing, making it clear that young people are feeling the effects of their lack of personal finance knowledge.
Gavin Oldham, chairman of The Share Centre, said: “As we move away from cash spending to plastic spending, people are becoming less engaged with money. People used to learn the value of money by saving pennies and pounds into a piggy bank but increasingly money is seen as non-tangible number on a screen. With many people starting their adult life with large student loans or unsecured debt from other sources, it is more important than ever to ensure school leavers are clued up on the basics when it comes to money.
“To ensure young people can prosper in the ‘real world’, children need to learn the basics and how much of an impact they have on every day finances. Shares4Schools works with hundreds of children in schools across the country, helping them to see how money and investment works in practice. Leaving it until after school is frankly too late, so the earlier children are helped to engage with it all, the more informed they will be when it really matters.”
School leavers were asked which of the below they were taught at school…
· What investing is (10%)
· What APR means (7%)
· How taxes work (9%)
· How a credit card works (10%)
· How a debit card works (11%)
· What the stock market is (9%)
· How a pension works (5%)
· How a mortgage works (7%)
· What a dividend is (7%)
· What an ISA is (5%)
· How a will works (5%)
· None of the above (71%)