Financial education starts earlier than you might think
Blog by Kevin Duffy, Scotland Partnership Manager at the Money and Pensions Service
Why build financial wellbeing from pocket money through to pensions? Because when we do, communities are healthier, businesses are more prosperous, the economy benefits and individuals feel better off.
The importance of talking money
As we move ever closer to becoming a “cashless society”, it’s essential that we still talk to our children and young people about the importance of understanding the pennies and the pounds.
A UK Finance study in 2020 found that only one in six payments are now made in cash, with the coronavirus pandemic accelerating a change in our spending habits. While advances in technology can increase convenience, improve customer experience and reduce our carbon footprint, we must be mindful that the next generation of bankers need to comprehend the basics of money management as they enter the workplace and make a meaningful contribution to the sector.
Perhaps surprisingly, children start to develop money attitudes between the ages of three and seven, and young people who remember learning about money at school are more likely to have good money habits and feel confident managing their money. New research from the Money and Pensions Service’s (MaPS) Financial Wellbeing Survey 2021 recorded that one in two adults (45%) in the UK don’t feel confident in managing their money day to day. The flagship research of more than 10,000 adults in the UK reported that 19 million people (36%) feel worried when thinking about their financial situation. Those who are most likely to feel worried when thinking about money are young people aged 18 to 34 years (50%), parents (48%) and private renters (51%), so it’s no wonder such a large number of people don’t feel equipped to tackle their money worries head-on.
With this in mind, there is a crucial role for parents, carers, educators and employers to take up.
Improving financial wellbeing for employees and customers
Financial wellbeing is about feeling secure and in control. It is about making the most of your money day to day, dealing with the unexpected, and being on track for a healthy financial future. In short: financially resilient, confident and empowered.
Our 2018 Financial Wellbeing Survey told us that almost half (47%) of UK adults don’t feel confident making decisions about financial products and services, but banks and bankers are well placed to improve knowledge and interpretation.
Having control over personal finances means that individuals are more prepared when unexpected challenges or costs occur, they enjoy better physical and mental health, and they’re able to build a level of financial resilience.
By addressing financial wellbeing, organisations can improve customer retention, customer acquisition, customer value and also enhance their external reputation.
Talk Money Week
Talk Money Week is an annual campaign to get the nation talking about money. Despite the COVID-19 crisis affecting our finances, 9 in 10 UK adults – that’s 47 million of us – don’t find it any easier to talk about money, or don’t even discuss it at all.
This year’s initiative takes place on 8 - 12 November and our participation pack contains a variety of ideas and resources to encourage involvement. However, we also know how important it is to keep those conversations going year-round.
Research shows that people who talk about money:
- make better and less risky financial decisions
- have stronger personal relationships
- help their children form good lifetime money habits
- feel less stressed or anxious and more in control
We want to turn talking about money from a taboo subject into something commonplace. Get involved and support our goal to improve financial wellbeing for people across the UK!
The Money and Pensions Service
We are an arm’s-length body sponsored by the Department for Work and Pensions and we’re transforming financial wellbeing in the UK. We help people, especially those most in need, and we’re here to ensure everyone in the UK makes the most of their money and pensions.
Our consumer service: MoneyHelper
We launched our new consumer service, MoneyHelper, earlier this year which brought together the legacy services of the Money Advice Service, the Pensions Advisory Service and Pension Wise. MoneyHelper is here to make money and pension choices clearer with free and impartial guidance that’s backed by government. For assistance updating your signposts to MoneyHelper, check out our brand toolkit.
If you’d like more information or wish to discuss further, please feel free to get in touch with me.Kevin joined the Money and Pensions Service as Scotland Partnership Manager in January 2020, having spent the last 20 years working in roles across banking and banking education for the Royal Bank of Scotland and the Chartered Banker Institute. He has significant experience of stakeholder management with financial services organisations, commercial employers and higher education institutions. He is passionate about the UK Strategy for Financial Wellbeing and enjoys connecting with partners from all sectors to deliver MaPS’ vision. Outside of work, Kevin is married with two children, lives near Glasgow and is a keen trail runner, when the Scottish weather allows.