After Halloween and Bonfire Night, there is a familiar cycle to the end of the year. Television adverts begin to start trailing their latest Christmas offerings, the shops begin to entice consumers through their Black Friday deals and inboxes are filled with links to the latest January sales offerings; meanwhile, in the personal finance pages of the newspapers, various articles start to appear, urging caution in consumer spending, usually in response to the publication of personal debt figures.
Working for a financial education charity, The London Institute of Banking & Finance, it can sometimes be exasperating to see this procedure play itself out time and again. It reveals, if nothing else, that very little progress has been made in raising levels of financial understanding among consumers. It is often a source of worry for me and my colleagues working to raise awareness of the importance of financial education of the example we are setting to the next generation.
The above perhaps should not, unfortunately, come as a big surprise. Financial education has only been included in the curriculum since 2014, some six years after the financial crisis, which itself was largely driven by irresponsible lending and the accumulation of unrepayable debt, underpinned by a lack of financial understanding. Since its introduction then, we have been keen to see its effects and have been tracking the impact of its inclusion through an annual research project, The Young Persons' Money Index. The latest version of the report, published only last month, looks at how young people currently interact with and understand the world of money and personal finance.
Two years on, we find ourselves in a similar position to when the report was first launched. According to our research, the majority of students (58 per cent) still do not receive any financial education in school. The problem is even more acute post-GCSE, where there is no compulsion for its delivery, and consequently only a third are leaving formal education, going off into the world having to make their own financial decisions, with at least a few money management lessons under their collective belts. Small wonder then debt charities are particularly busy at this time of year.
There is however some cause for optimism at least and certainly, with the right emphasis in the curriculum and support given to teachers, genuine improvements can easily be made. Our research points to a huge appetite among young people to understand more about their personal finances, as well as the beginnings of more positive financial behaviours. The vast majority of teenagers for instance say they are saving regularly, while particularly at an older age, the majority are using a range of different products and services and are becoming increasingly comfortable using different means, such as online and mobile banking.
It is vital therefore that we work to tap into this interest and encourage it, by ensuring financial education is delivered effectively and consistently. It has been pleasing therefore for to work with the All Party Parliamentary Group on Financial Education for Young People to identify and develop eight key - and crucially achievable - recommendations to improve financial literacy in schools. These range from strengthening provision and investing in resources, to improving teacher confidence and measuring long term impacts.
If we get it right and are able to put the next generation in control through these recommendations, then hopefully 2017 will be remembered as the beginning of the end of one particular Christmas tradition; excessive expenditure, largely funded by debt, met with ineffective warnings and delivered to a populace with little understanding.
For more information on financial education, please visit: www.libf.ac.uk/financial-capability
Alison Pask, Managing Director Financial Capability & Community Outreach - The London Institute of Banking & Finance