In the Autumn 2021 Budget yesterday, Chancellor Rishi Sunak said the Government would spend £560m on a new numeracy scheme for adults.
Stewart Perry, head of responsible business at Quilter, said that while the scheme is a step in the right direction the Government would be better by focusing on financial education rather than focusing on just numeracy skills.
He said evidence shows financial education works and would be a “better lever to pull.”
Mr Perry said: “There continues to be a severe lack of financial capability in the UK and the only answer is financial education. Financial education is crucial if we want to equip young people with the skills to manage their finances effectively once they reach adulthood.”
According to the FCA’s financial lives survey only 37% of us feel confident managing money. Mr Perry said this can only be addressed by teaching positive behaviours and attitudes to money, especially in early years education.
He continued: “Research has shown that our financial attitudes are shaped early on in life, around the age of 7. Some children will pick up positive habits like effective budgeting, responsible borrowing and long-term saving from their parents. But we need to ensure all children get a grasp on the basics of financial prudence in primary schools.”
Quilter suggested that one way to fund financial education lessons at scale in the UK would be to redirect unlocked funds from the proposed expansion of the Dormant Assets Bill.
The scheme has already released around £750m to charities and social enterprises and is set to unlock an additional £880m in the coming years.
Mr Perry said: “While improving adult numeracy skills is a sensible plan, we should be as a matter of urgency ensuring future generations should be equipped to be good with money.
"An evaluation report of the industry supported by the KickStart Money programme, shows that following financial lessons, two out of three primary aged children were actively working towards a saving goal, more than double the national average. On top of this over 75% of the children that received the lessons delivered by the charity, MyBnk, were able to delay spending.
“In short, financial education works and might be a better lever to pull than just focusing purely on numeracy skills.”
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