Moneywise kicks off Kids and Cash campaign
Going to school is not just about gaining qualifications - it's also about learning life skills that prepare children for adulthood. The National Curriculum already includes complusory subjects such as physical education, yet the next generation is not currently given the opportunity to learn about money despite the fact that this is an essential part of everyday life.
This is why Moneywise is petitioning the government to introduce personal finance education to the National Curriculum.
Currently, personal finance education is not compulsory and schools are under no obligation to offer this subject to their students. But we believe schools have a role to play in teaching children about money, from the importance of budgeting and not getting into debt, to how to manage their income and make it go further by saving or even investing.
If the government were to include personal finance in the National Curriculum - so that it was taught alongside core subjects such as geography science and history - then children would be given the opportunity to prepare for adulthood from a young age. This would give them more choices in later life and would put them in control of their finances.
Stories of people struggling with debt, being financially choked by high interest loans and even losing their homes and becoming bankrupt are too commonplace. Personal debt (including mortgages) in the UK has already exceeded the £1 trillion mark and is rising by over £1 million every four minutes.
And the situation is only likely to get worse in 2008, as energy and food bills rise and home owners on fixed rate mortgages face steeper monthly repayments. Fears that we are facing a house price crash and even a recession mean having the ability to manage your money sensibly is more important than ever before.
Yet every year, young people leave school or university unable to make sound financial decisions.
There are some exceptions. Around 10,000 students aged between 14 and 19 are currently studying personal finance qualifications offered by the ifs School of Finance. The charity, which is also incorporated by the Royal Charter, is also campaigning for it to be compulsory for schools to offer personal finance lessons to their students.
Phil Hall, of the ifs School of Finance, says around 4,500 students will study its AS or A level equivalent courses this academic year while 5,700 will take GCSE equivalent courses. Although the former courses are designed for students who wish to pursue a career in financial services, its GCSE level qualification is intended to equip students with essential life skills.
Hall says: “The aim of these qualifications is to provide all young people with the ability to make informed financial decisions enabling individuals to manage their finances effectively. The ability to do so is a crucial life skill for all - no matter what income, class, background or type of career they may wish to pursue.”
Newham Sixth Form College
Moneywise TV recently met with several students from Newham Sixth Form College who are studying financial studies qualifications at AS and A level.
The course includes learning the basics of personal finance, as well as the stockmarket, tax and how businesses operate.
One second-year student, Mohammed Sheikh, said: “The course has taught me the different ways to save and make investments, such as looking at the stockmarket, premium bonds and interest rates as well as stuff like opening bank accounts. I’ve been able to help my friends who come to me for advice.”
First-year student Yasaar Cooraban added: “This is not just a subject or topic for education, it’s also knowledge about future life. I am aware of what financial products there are out there and how to apply that knowledge.”
To watch the Moneywise TV report click here.
How can you get involved?
The first thing to do is sign our petition on the Prime Minister's website. The more signatures we get the more the government has to listen.
Research by the Association of Investment Companies found that over 90% of parents and teachers think children should be taught about personal finance at school.
Whether you're a parent or grandparent to school-aged children, are a student yourself or simply want to see the next generation get the opportunity to learn about money then you can get involved in our campaign. Over the coming weeks Moneywise will continue to look at this issue and put pressure on the government to make personal finance a part of the National Curriculum.
We have also set up a Facebook group where you can add your views and show your support.
A form of National Savings Certificate, premium bonds are effectively gilt-edged securities: you loan your money to the government and, in return, it pays you for the privilege with a guarantee it will return your capital at a specified date. Where premium bonds differ is that the interest payments (currently 1.5%) are pooled and paid out as prize money and you can get your cash back within a fortnight, with no risk. Launched by Chancellor of the Exchequer Harold Macmillan in his 1956 Budget, every single £1 unit has the same chance of winning and in May 2011, 1,772,482 winners (from a total draw of 42,539,589,993 eligible bond numbers) shared £53,174,500. The odds of winning are 24,000 to 1 and the maximum holding is £30,000 per person but it remains the only punt in which you can perpetually recycle your stake money.