Financial education for children a powerful agent for change
Those attempting to challenge and change financial systems are now looking to recruit a new army: the young.
But this “Generation Y” – those aged between 18 and 30 – aren’t mere foot soldiers to this cause. Many in this age bracket are leading from the front, with innovative projects designed to engage younger people, and get them thinking about the impact of the financial decisions they make.
Since the financial crisis there has been a drive to rethink our financial systems: to deliver more sustainable longer-term profits that take account of both social and environmental consequences.
But much of this debate has centred on impact investing and divestment from fossil fuels. By its very nature this has acted as a barrier for many younger people, who typically don’t have sufficient assets to invest, or divest – just credit cards, bank accounts and student loans.
This isn’t the only barrier that needs to be overcome. The fallout from the financial crisis has left many younger people disillusioned by what they perceive to be the self-serving interests of larger corporations, and of the banking industry in particular.
This has been highlighted in two recent surveys. Triodos Bank recently undertook qualitative research among the under 30s. James Vaccuro, head of strategy at the bank, said the words most commonly associated with the banking industry were “unscrupulous”, “unethical”, “unaccountable”, “impermeable” and “self-serving”.
Ongoing research being undertaken by the Green Alliance uncovered similar attitudes. It found a high level of mistrust and sceptism of the banking industry, but this was allied with a sense of risk-aversion and conservatism. As a result many in this age group were less likely to put their money with smaller more progressive players.
Will Andrews-Tipper, the head of sustainable business for the Green Alliance said: “This is the generation that were leaving school or university as the financial crisis hit, so it is perhaps not surprising that safety is a key priority, which they associate with larger institutions.”
But he said many in this age group are caught in a Catch 22. “They know they need bank accounts, credit cards and mortgages – but there is no real trust or warmth for the big banks that provide these services. As a result they are disengaging when it comes to personal finance, and are not taking an interest in what other options might be open to them.”
Education is often the key. Many of those that took part is this research did not necessarily know that the money they deposited with bank was then used to fund other projects.
The campaign to ensure children know more about money has been spearheaded by Martin Lewis, founder of moneysavingexpert.com and the Personal Finance Education Group (PFEG). From September this year, children in England will begin to learn about personal finance as part of the school curriculum. This will include basic financial skills (such as calculating interest rates and APRs) as part of their maths lessons, as well as learning about budgeting, planning for the future and how public money is raised and spent within the citizenship curriculum.
Another initiative aims to provide a “financial inheritance” for children in care. UK charity, The Share Foundation, aims to raise funds so children in care can have their own Junior Isa.
The government puts £200 into each of these accounts, but then The Share Foundation – run by those within the financial services industry – will raise additional contributions.
Gavin Oldham, chair of the trustees, says this project is about more than raising charitable donations. “Education is a key part of this initiative. With PFEG we can provide guidance on handling money generally, and – more specifically – how these Isa investments can be used to provide for the future.” Since it’s launch in November 2012, it has helped more than 50,000 children in care.
But Vaccuro said he hoped that in time the remit for financial education would be expanded, so children could learn how to be better financial citizens, rather than just financial consumers. “We should be teaching our younger people how financial systems work, what their agency is in it, and how this can be leveraged to bring about change.”
The challenge for those looking to engage younger people is to convince them that the financial decisions they make do have an impact on the political issues they care about: be it climate change, corporate tax, or the living wage.
Lisa Stonestreet, the programme director of UK Sustainable Investment and Finance Association (UKsif) points out: “Money is a powerful agent of change. We want to reach out to younger people and ensure that they are part of this debate.”
To this end UKSif is rebranding its National Ethical Investment Week as Good Money Week and will be specifically targeting the student population, through social media campaigns, and partnerships with university groups. “Sustainable finance is about more than just investment. We want people to think about all aspects of their money, from student bank accounts to credit cards – and start asking question of these providers.”
She said this engagement can produce change. Many of the major banks do valuable work with local communities, educational schemes and social enterprises. “Do customers support these initiatives or would they like to see their bank doing more?”
She added: “We are not making judgements as to which bank, pension company or investment fund is ethical or not. We’d like to see customers of all ages, but particularly younger people access this information and make their own decision about how their money is used.”
There have been a number of initiatives that attempt to make such distinctions. The Move Your Money campaign, rates individual bank accounts, and tries to persuade people to move their current accounts and savings to those that act more responsibly. Although not primarily aimed at younger people, the campaign manager, Charlotte Webster said much of their support has been from those aged under 30.
However Push Your Parents started out as a student campaign. It has been inspired by the divestment movement, where students in the US and Australia have successfully managed to persuade those running university pension funds and endowments to divest from fossil fuels. Here, the campaign aims to get student mobilising their parents, by demanding that their pension funds are used to counter climate change. The logic is simple: parents are more likely to act on such issues if they can see it is their own children’s future that is at risk. The tagline of the campaign is hardly subtle: “Dear Mum and Dad, did you know your pension is fucking up my future?” – but this direct approach and its presence on social medal has certainly helped it gain a groundswell of support among students.
Jo Beardsmore, the outreach officer of ShareAction said it was a myth that younger people were disengaged and disinterested in such issues. The group runs training courses for those looking to ask questions at bank (and other corporate) AGMs. “When young people want to protest they don’t just stand there with a placard now. They want to arm themselves with information, engage in the financial arguments and change things for the better.”
The children and finance series is funded by Unicef. All content is editorially independent except for pieces labelled advertisement feature. Find out more here.
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