As younger clients then begin to earn more and invest or inherit / are given substantial gifts, they are then in a better position to be able to make sound financial decisions for themselves.
Discussing income tax or capital gains tax benefits as part of financial planning is also a good place to start.
FTA: As an educator for the Personal Finance Society, working with 16-18 year olds, have you seen social media playing a factor in how young people perceive their finances/investments?
HT: There have been a few examples of students asking about crypto-currencies, NFTs and various side-hustles. When questioned, they usually point to influencers on tik-tok and Instagram.
Generally, it’s curiosity about investments rather than investing themselves but they know very little about stock markets or traditional investment vehicles such as ISAs and pensions.
FTA: How important is financial education in combating misinformation spread via social media?
HT: Financial education is vital in combating misinformation in my opinion as it helps people make more informed choices about their finances. I believe this is the case for all age groups but in particular young people as scams and get rich quick schemes seem to be prevalent on social media.
FTA: Do you think the school curriculum does enough to educate young people about their finances?
HT: Based on my work as an Education Champion, I don’t think the school curriculum does enough to educate young people about finance.
I’ve found that the financial education received by students has been sparse, and sometimes unhelpful.
For example, in a ‘My Personal Finance Skills’ session on debt, a group of students explained they had had a previous session on debt that scared them so much they were petrified about taking on any debt at all.
At the end of the session they said they felt relieved to learn that not all debt is terrible and knew what APR meant and could check different deals themselves.
Bodies such as the PFS My Personal Finance Skills do help bridge the gap in financial education but it is limited to available volunteers to facilitate the sessions.
Banks and other larger financial institutions also offer support but this has limitations too. Unfortunately, this means that a lot of schools and students miss out on good financial education.
Schools aren’t the only resource available to educate students and family have a part to play but as a study by The FT and Ipsos Mori suggests, there is a lack of financial literacy amongst many adults too.
