Wednesday 15 November 2017
Research by the Money Advice Service shows that talking to children about money and giving them experience of making money decisions could be as important as saving for their future.
Findings from a report released today by the government-backed Money Advice Service, demonstrate a worrying lack of money skills among children and young people in Wales.
The survey found that children whose parents involved them in decisions and discussions about money and allowed them to experience using money from as young as four, are more likely to develop vital financial skills. These skills can have a major positive impact on their ability to save, budget and plan ahead financially in later life. However, children who aren’t included in these discussions, or don’t experience using money, risk being left behind.
Whilst the research highlights the importance of experiencing managing money during childhood, early findings indicate that many 16-17 year-olds are ill prepared for dealing with adult financial responsibilities. 28% of those with a bank account say they haven’t had experience of putting money into one. With 28% not even having a bank account and just over half not knowing how to read a pay slip properly.
Parents in Wales were asked at what age they thought a person’s money habits and attitudes were formed, half of parents in Wales think that habits become established at age 12 or later. This is in contrast to previous research Money Advice Service research which showed that by age seven, children are able to self-regulate their behaviour and by the time they are eight, they have a good enough concept of the future to begin to build a savings habit.’
When it comes to saving money, only 12% of 8 - 17 year-olds save money every time they get money, 31% save most times they get money, 50% save sometimes and 7% never save at all.
The report shows that there is still an opportunity to increase levels of financial education in the classroom. Currently only 35% of children surveyed in Wales aged 7-17 say they have learnt about money management at school and 7% have talked to their teachers about money. Positively nine out of ten young people that had learnt about money management at school said it was useful.
Encouragingly three in four children talk to their parents about money with seven out of ten parents believing that they are a good financial role model for their children. Considering these statistics it is surprising that only two in three parents feel confident talking to their children about money. Only one in three parents talk to their children about household finance, although this does increase with age. Yet still only 48% of parents of 16-17 year olds say they discuss their household finances openly with their children.
Furthermore, parents’ behaviour may not always set the best example with 55% not saving regularly, 43% not feeling confident managing money and most worryingly 75% find keeping up with their credit commitments and bills a burden.
“There are many ways that parents can start to encourage their children to interact with money from a young age,” said Lee Phillips Wales Manager, Money Advice Service. “We know that children learn best when they gain practical experience with money, and allowing them to make decisions and learn from their mistakes lays the foundations for better money management skills as they grow up.”
Money Advice Service’s report was launched at Principality Stadium as part of Financial Capability Week, in partnership with Principality Building Society. In light of the report from Money Advice Service, the Society is teaching more than 40 classes in 25 schools Wales to provide financial education lessons to more than 1,000 children.
Julie-Ann Haines, Chief Customer Officer at Principality Building Society, said:
“Principality is committed to helping improve the financial skills of young people and this year has been a remarkable with more colleagues than ever getting involved, demonstrating all the values which the Society stands for. In the past year more than 3,000 school children have benefitted from financial education classes Principality colleagues have participated in.
“Our schools do a great job of educating our young people and to prepare them for life but it is also vital that private sector organisations with expertise provide additional support and help the communities they serve. The report published by Money Advice Service Cymru sends a clear message that financial services companies need to do more to help children and their parents talk about money and what it means for their futures.
“I am immensely proud that my colleagues across Wales see helping their local schools as an important way of immersing themselves in their communities. It’s what we stand for – helping people at every stage of their lives and across all generations of families.”
Danielle Cope, Campaigns, Advocacy and Policy Advisor for Action for Children in Wales, said: “Action for Children recognises the importance of equipping young people with the financial skills they need in an increasingly complex world. Poor money skills can have a devastating impact on a young person’s health, mental health and overall wellbeing. MAS has published a really important report that demonstrates how essential it is for parents, carers and teachers to help children develop a healthy attitude towards money from an early age. Children need the right skills to become financially resilient so that they can grow up and confidently face the pressures of adult life.”
About the research
The Money Advice Service commissioned BMG Research to carry out this nationally representative survey of children and young people aged 4-17 in the UK. In total 4,958 children and young people and their parents took part in this research from March to June 2016. This included 593 children and young people, and their parents in Wales.
About Money Advice Service
The Money Advice Service is an independent organisation. It gives free, unbiased money advice online at moneyadviceservice.org.uk, over the phone 03000 500 5000, and face to face right across the UK. The service was set up by the Government and is paid for by a statutory levy on the financial services industry, raised through the Financial Conduct Authority. Its statutory objectives are to enhance the understanding and knowledge of members of the public about financial matters (including the UK financial system); and to enhance the ability of members of the public to manage their own financial affairs.
Press contact
Alexandra Annable - Money Advice Service
alexandra.annable@moneyadviceservice.org.uk
Tel: 07918780916
Notes to Editors
