Financial Education for the young
Financial education is finally being brought into secondary school education, after years of the old and young being scammed and betrayed by their banks that they entrust their money with.
What will this do?
Young adults will soon have the opportunity to learn about credit & debit cards, insurance, savings and pensions. Previously we were thrust into the outside world and having to deal with such things without the knowledge to make the correct decisions, so we believe such education is vital, and long overdue. As much as some may wish money not to be as important as it is, we all have to live with it, so why isn’t financial knowledge just as important?
For young people just simply having the knowledge of finances could assist them when deciding whether or not to get that loan or not. Knowing how to budget and most importantly reading the ‘small print’ of contracts they take out with lenders/banks could potentially save them hundreds of pounds.
How much can be saved?
It is estimated by the Government-backed Money Advice Service (MAS) that consumers lose £428 every year due to a lack of knowledge and understanding of terms and conditions of agreements and financial terms in general. Yet another reason we should have been teaching our young in schools.
To put the above figure into context we estimate the savings that consumers could make with the right financial education could be over £20 billion per year!
Learning about financial mathematics could prevent scams, such as the mis-sellings of payment protection insurance (PPI) and Packaged Bank Accounts. For example £16 billion has been refunded so far to consumers as a result of the PPI scam, the biggest financial scandal ever to hit the UK.
It’s clear that the tactics used by banks and lenders when mis-selling PPI and Packaged Bank Accounts went unnoticed by so many for so long because banks knew they could take advantage of the simple fact that the vast majority of people didn’t have the knowledge to spot the signs, and because of this we placed our trust in our lenders to treat us fairly.
They need to know
Young adults need to know about money, finance, loans and savings because these are the ingredients that keep us going whether we like it or not. If the next generation grow up knowing little about money or loans, what hope have we got for our future?!
Children often copy their parent’s habits without even thinking about it most of the time, if we educate our children to understand that banks and lenders can be deceiving, and how to be safe with their money, and then hopefully scandals like PPI can be avoided in the future.
Your Money Claim welcomes the news and believes it will prove to be an invaluable part of children’s education moving forward.