Louise Hill, COO and co-founder of GoHenryexplored…
The past year has been an extremely difficult one for many families who are still dealing with the aftermath of multiple lockdowns. With the constant talk of rising living costs and an energy crisis, consumer confidence is as low as it was at the peak of the pandemic last year.
The energy price hikes are something none of us could reasonably have anticipated. After a turbulent two years, we find ourselves in a situation where, now more than ever, access to financial literacy is essential to equip the next generation with the tools they need to navigate tough times.
Prioritizing financial literacy will propel the UK economy
Financial literacy is widely recognized as a key factor in lifelong financial outcomes and as an essential “life skill”.
Recent economic modeling by GoHenry found that by 2050 the UK economy would be £200 billion richer if children were financially literate from an early age. It also found that those who did not receive financial education as children are more likely to be unemployed or earn less today than those who did.
Despite progress in improving financial literacy in UK schools, education has been the brunt of the government budget for years running, with funding falling by 9% since 2009. This has put pressure on parents and businesses to play a bigger role in teaching younger ones Generations have the skills to manage their money effectively.
We know from discussions with our own customers how critical this is. We have parents who have fallen behind on energy bills or got into debt at a young age and want to make sure their own children don’t face the same challenges they did. We owe it to these parents – and their children – to make young people’s financial education a priority now.
Creation of a national financial literacy strategy
With significant investment required to support the UK’s “leveling up” agenda, a collaborative strategy is essential to improve the country’s financial literacy.
Managing money effectively requires sophisticated skills ranging from basic math skills to budgeting, an understanding of how interest rates work, or emotional regulation to avoid waste. A recent CBI Economics analysis commissioned by GoHenry and Wilson Wright highlights that financial literacy increases early career earning prospects by up to 28% and that financially literate students are more likely to start a business.
A comprehensive and consistent curriculum with input from across England, Scotland, Wales and Northern Ireland from primary school level will ensure children receive a consistent financial education that will influence their attitudes towards money throughout their formative years. This is important because money habits are formed as early as age seven.
Additionally, our analysis, commissioned by CBI Economics, found that a collaborative approach with the private sector to improve and promote financial literacy – particularly among young people – is critical if financial literacy is to succeed. Work in this area has already begun with charities such as the Center for Financial Capability, which work to provide quality and effective financial education from elementary school upwards.
We need the support of government, businesses, parents and schools to make this work
Financial literacy offers more young people the chance for a bright and prosperous future. It also comes with a range of individual, societal and workplace benefits – we just need to empower young people (and those who teach them) with the right tools and knowledge.
To achieve this, greater collaboration between the public and private sectors is crucial. We want more companies and organizations to share their time, resources and knowledge to help parents and teachers improve financial literacy – and future prospects – for the next generation.
Together we can help close the financial performance gap that costs the UK billions each year; It’s not a race that we can win alone.
https://techround.co.uk/news/why-financial-literacy-needs-to-be-a-group-sport-not-a-solo-race/?utm_source=rss&utm_medium=rss&utm_campaign=why-financial-literacy-needs-to-be-a-group-sport-not-a-solo-race Why financial literacy needs to be a group sport, not an individual race