"The greatest revolution of our generation is the discovery that human beings, by changing the inner attitudes of their minds, can change the outer aspects of their lives.”
William James (1842-1910)
Last Thursday’s A-level results from the Joint Council for Qualifications showed an overall 3.3% drop in entries since 2017. However the most worrying figure was the nearly 6% fall in students taking Mathematics, compared to 2018.
Getting started in adult life is tough for young people. If they go to university, they will be burdened with a student loan of c. £50,000 (with interest charged at 6%) when they graduate: hardly surprising that they’re so reluctant to take on still more debt to buy a house or flat. And, while employment statistics may look particularly encouraging for older folk, the impact of the 2011 abolition of a compulsory retirement age (an EU requirement) continues to makes entry into the jobs market difficult for young people.
This week we publish our annual subject analysis of A-level results, looking particularly for any hints that financial capability is getting more attention, and provide links to a range of resources which can help teenagers who’ve lost out.
Mathematics matters for financial education because the Government still appears to hold to the mistaken belief that it is an appropriate carrier to learn about money. This is a legacy from Liz Truss’s influence as Chief Secretary to the Treasury (she’s now moved to International Trade): so hopefully, with a new team at both HM Treasury and the Department for Education, we may see Financial Education as a new subject in both GCSEs and A levels.
However, the news that a student taking the Edexcel exam only needed to achieve 14% of correct answers in order to get a pass in Mathematics (The Times, 15th August) is not encouraging. This suggests that just 81,600, or just over 10% of the annual population cohort, exceeded this basic level. If Mathematics cannot perform better than this, how can we expect it to be a satisfactory carrier for financial education?
The two top most popular A levels for young men continue to be Mathematics and Physics and, for young women, Psychology and Biology. Given that the former pair open into jobs with significantly more earnings potential than the latter pair, it is hardly surprising that the gender pay gap will be with us for yet another annual cohort. However, it is encouraging to see ‘Girls overtake boys in science for the first time’ (The Times, 16th August), even if this is predominantly due to their dominance in Biology.
We need to see universities placing far more emphasis on the need to see life skills in their candidate requirements. Until that happens, financial education will continue to languish in the margins, and young people will continue to be dependent on extra-curricular initiatives to help them:
- gain confidence in budgeting and financial planning,
- understand tax and benefits,
- cope with debt, and credit cards, in their various forms,
- understand how delayed gratification provides the opportunity to save and invest for the future,
- see where insurance fits into the mix, and
- cope with renting, leasing or buying property.
It’s a confusing array, and currently so much is learnt by hearsay and making mistakes. This is not the best way to enter adult life.
Share Radio continues to provide the very accessible audio version of the Open University’s ‘Managing My Money’ course, which covers all the above. Each week includes two episodes of c. 25 minutes duration, and there are helpful arrays of slides to illustrate the various themes. It works well as an ‘incentivised learning’ course which can be sponsored by parents or grandparents: £10 for each week completed, plus a bonus of £20 for finishing all eight weeks, providing a well-rounded introduction to money for overall incentive payments of £100. There’s a third-party referee email notification system, designed to help monitor progress and make those payments.
Not surprisingly, I particularly like episode 10, on investment: a really good introduction to understanding the stock market. In this respect, The Share Centre also runs a real investment competition for schools each year, ‘Shares4Schools’. Teams of Year 12 students from across the United Kingdom compete in a league table in order to build on a £2,000 initial stake, to which The Share Centre contributes.
Staying with investment, there’s a new book produced by Lord Lee called ‘Yummi Yoghurt’, designed particularly to help young people understand how to assess different companies and investment opportunities. He’s just produced a new video explaining how it works.
Meanwhile, there are lots of resources available from a host of other financial providers. Two particularly worth mentioning are: the RBS MoneySense programme, a comprehensive introduction to understanding money, and a new booklet from DST called Joe’s Journey. Both are well worth exploring for teenagers in your family. For younger students, there’s a new Teacher’s Manual of Financial Education for Year 6 Students, authored by Quentin Nason of www.citypayitforward.com.
There are many others also doing their best to raise the profile of financial education, including:
- the Money and Pensions Service;
- the All Party Parliamentary Group on Financial Education; and
- TISA (The Investment and Savings Association).
But there is so much to do. And that’s why Gordon Brown introduced the Child Trust Fund “to establish a savings habit among children: providing a cushion of financial assets as they embark on adult life, and enabling them to be confident in the management of their finances”. With the oldest recipient of these accounts turning 17 on 1st September, it comes right into the mainstream for Year 12 and Year 13 students. That’s why The Share Foundation is working so hard to recover the scheme, including launching its ‘Child Trust Fund Ambassadors’ programme. More on this next weekend.
Understanding money requires both learning and experience, and should be accessible by all adolescents - whether or not they take A levels. If we want the next generation, and therefore the United Kingdom, to succeed in future, we must improve the level of financial capability.
Gavin Oldham OBE