Why wait till adulthood? Research shows significant benefits of delivering financial education early

#TalkMoney Week, running from Monday 8 until Friday 12 November, is an annual campaign from the Money and Pensions Service to get the nation talking about money. 

Recent research shows that delivering financial education to primary aged children increases their knowledge and understanding of money and financial issues. During Talk Money Week, it is crucial that conversations about finance and money are embedded into all aspects of daily life, including the classroom.

This study was funded by the Centre for Financial Capability, in collaboration with the award-winning charity MyBnk and independent evaluators Substance. The research, involving 600 primary aged children, found that children who received financial education lessons were more able to understand gratification, wages, and monetary consequences compared to before starting the sessions. The improvements were significantly bigger for children who had poor financial capabilities before starting Money Twist, the financial education session.

All children showed overall improvements in their financial capabilities. Before starting Money Twist, the children correctly answered 62% of survey questions. This rose to 70% when children were asked the same questions a few months after completing the programme. The area that improved most was with children being able to understand, discuss, and articulate new knowledge of money habits, where correct answers rose from 59% to 73%.

Children who had poor financial capabilities before starting Money Twist made large improvements by the time that they completed the programme. Of children who gave incorrect responses before starting the programme, the average score of correct responses rose by 54% after completing the programme.

This research comes just days after the Chancellor included a new national numeracy programme in the Budget called ‘Multiply’. The programme will address low levels of poor numeracy skills in UK adults and has set out to improve numeracy levels in 500,000 adults from April 2022 with £560 million in funding.

According to National Numeracy, around half of working age UK adults have primary school level Mathematics skills, and up to 8 million people in England have numeracy skills lower than that expected of nine-year-olds.

While Multiply is a good step in the right direction, this measure does not get to the root of the issue. Financial education for children must be the top priority to effectively combat the challenges of low numeracy levels, which include unemployment, poverty and lower levels of wellbeing. Research has shown the strong correlation between numeracy and financial capability – it was one of the reasons financial mathematics was added to the national curriculum in 2013.

Research has shown that money forming habits begin at the age of 7, so it is vital that financial literacy and capability be included at primary level. By delivering financial education within the classroom, the Centre for Financial Capability equips young people with the necessary skills to develop positive money attitudes and to manage their finances effectively when they reach adulthood.

The Centre is a new charity, founded by the backers of the KickStart Money initiative. KickStart Money is an award-winning coalition of major UK financial institutions which raised £1.2 million to fund expert-led financial education to over 20,000 primary school children. The Centre for Financial Capability aims to give every primary aged child “an effective and high-quality” financial education by 2030 and has a long-term commitment to financial education and research.

Jane Goodland, Trustee of The Centre for Financial Capability said:

“We were pleased to see that attention is being paid to improving the nation’s numeracy in the Chancellor’s Budget. Higher levels of numeracy will aid employment, the economy and general wellbeing. However, leaving financial education until adulthood can be too late. Our research shows the importance and positive results of providing financial education lessons to children at primary school age.

“By delivering financial education lessons to children, the Centre ensures that children are equipped with positive behaviours and attitudes to money, which will benefit them in adulthood. To truly level up the nation, we must ensure that future generations are financially literate. Prevention is more important than the cure – we must equip our children before it’s too late.”

Guy Rigden, CEO of MyBnk said:

“We have strong evidence of a divergence in life chances of children. Those who need financial education the most benefit the most from it, it literally levels the playing field. We must catch pupils young with things like budgeting and saving to develop positive money mindsets and habits. By making financial education compulsory at primary school age and supporting teachers we can have a powerful impact on the lives of young people.”