Personal finance should be added to UK school curriculum as a more defined subject, according to Justin Urquhart Stewart, co-founder and head of corporate development at UK investment company Seven Investment Management (7IM).
Urquhart Stewart commented on the matter following last week’s call for a greater focus on maths on the part of schools by UK chancellor Phillip Hammond in his Budget.
“Given the depressed UK growth projections, it’s hard not to see the Budget’s maths focus through the prism of ‘gosh, we’re going to need some decent mathematicians’, said Urquhart Stewart. “It’s a sensible approach, but it would be even better if it could be joined up with decent personal finance education. Financial literacy goes hand in hand with basic numeracy skills and neither have to be daunting.
“Not everyone agrees that financial education in schools should be a priority, but like everything else, it is all about how it is delivered.”
Urquart Stewart, pictured below, making maths relevant and fun has always been the key, and personal finance is, he believes, “the perfect channel”.
“I’ve never met a young person yet who isn’t interested in money,” he said.
“I came across a mathematics teaching blog by Tony Cotton. Cotton complained about the stories we tell about maths – that it’s a hard subject, thereby somehow elevating those who do well to an almost unobtainable, elitist status.
“I couldn’t help but see parallels here with the financial services sector, whose capacity for jargon has not covered it in glory, but has certainly helped build some intimidating ivory towers – and almost cult like personalities –along the way.”
At heart, financial literacy all comes back down to numbers, said Urquhart Stewart. And if people don’t challenge the myths about maths then they perpetuate them – with the same being true of personal finance.
A 7IM survey, released earlier this year, found that one of the reasons people give for not planning for retirement properly is that they find it “all too complicated”. One in ten say they don’t understand enough about pensions and it puts them off doing anything about it.
“It’s the classic ‘caught in the headlights’ stuff,” said Urquart Stewart. “And it is dangerous. If we pretend it’s all some mystery that can only be understood by the privileged few, we dissuade millions of people from making the effort to build basic numeracy and financial capability skills that are vital for healthy living.
“Obviously that starts at school, but research from the Money Advice service earlier this year suggested that only 40% of children aged 7–17 say they have learned about managing money at school or college, and this is consistent across all age groups.
This is shameful. I want kids to leave school able to understand how compound interest works but it’s equally crucial to be able to budget and work out, say, the best value between two different-sized packs of soap powder on the supermarket shelf.”
Urquhart Stewart also calls more adult education, particularly as the recent FCA Financial Lives Survey showed that even at 55-64, only half the population have given any thought to how they will manage in retirement.
“This is a challenge we can’t ignore but millions do,” he added. “We have to ensure they have the skills and understanding to recognise what they need to do.
“For me, the secret to financial literacy is making maths and personal finance relevant and fun. And I’m deadly serious about that.”