As a mother of two, I’m discovering that education has changed dramatically since my 1970s schooldays. Maths is now called ‘numeracy’; long division has become ‘chunking’; and free school milk has gone. But one change in the last year was long overdue. Since September 2014 — after years of campaigning by the likes of MoneySavingExpert founder Martin Lewis — financial education has been explicitly included in the National Curriculum for 11-to-16-year-olds.
Obviously it’s too early to tell whether teaching finance in secondary schools will be socially beneficial. But there’s plenty of evidence that young adults are currently ill-prepared for the credit temptations of the world we live in. An astonishing one third of 18-to-24-year-olds are over-indebted, according to the Money Advice Service. And the debt advice charity Step Change says that the fastest increase in demand for its services comes from young adults.
But research from Cambridge University suggests that attitudes to money are hardened at a much earlier age: astonishingly, from as young as seven. It is this report that prompted the Citizens Advice Bureau in Hart, Hampshire, to provide money advice lessons for primary-school pupils. And by a twist of fate, the lessons have been trialled at my own old school, now called Cranford Park in Yateley.
Although Hart is not a poor area it has a relatively high rate of home repossessions, according to Ailsa Kempthorne of the local Citizens Advice Bureau. She explains, ‘We see third or fourth generations of the same family that come to us about the same sort of debt issue. We can also see how that impacts negatively on their health and wellbeing.’
In response to the damage done by debt, Hart CAB has created ‘Marty Martian’s Money Mission’ for children aged five to seven. This programme aims to teach both the maths of money — how to add up coins and notes — and more importantly, healthy attitudes to saving and spending. Marty has to learn to differentiate between a need — such as mending his spaceship — and a want, such as buying sweets. Then he can start figuring out how to spend his limited cash accordingly.
All the parents I spoke to in the playground thought these lessons a good thing, and the children seemed to be enjoying them. But research from the Money Advice Service makes two things very clear. First, that children primarily learn money habits from their parents — from what they do, that is, rather than what they say. Parents who fail to budget responsibly and fall into financial difficulties pass on those habits to their children — which suggests that it’s the adults who need to go back to school.
Secondly, cultural influences of television, advertising, social media and peer pressure also play a powerful role in forming attitudes to cash. These influences come in many forms: at the end of each month, for example, I receive numerous emails from retailers with special offers enticing me to spend my pay cheque: saving is sold as boring, but fast fashion as fun.
Meanwhile, the government is encouraging the young to regard hefty debt as completely normal. How? By encouraging them to go to university. An average student outside London will graduate with £35–40,000 of student loans, according to Which?
Recently my daughter and I were singing along in the car to ‘Time of our Lives’ (I’m no longer allowed to listen to dull old Radio 4). The rappers Ne-Yo and Pitbull — favourites of Spectator Money readers, I’m sure — extol the benefits of spending their (late) rent money on going to a nightclub, because it’s cool to be careless with cash. Maybe that’s not a problem for multimillionaire pop stars, but it’s a harmful message for the rest of us.
Humans make mistakes: we’re not rational and too often we make poor, emotionally clouded decisions. Policymakers have already recognised this: auto-enrolment forces us to save for our retirement; banks are restricted as how much they can lend in mortgages. Is it time for the regulator to go one step further and restrict the amounts we can borrow from all sources? Surely it would be better for Britons to be educated from childhood to take sensible financial decisions — because government can’t change human nature any more than it can regulate rap lyrics.