84% of young people get no financial education. That's not the real problem

Financial advisers need it more.

The Chartered Institute for Securities and Investment (CISI) said yesterday that it supported a private member's bill introduced by Thomas Docherty MP to include financial literacy in the national curriculum.

A study in July found that 84 per cent of young people aged 18-25 hadn't received any formal financial education. But it would be interesting to find out how formal financial education affects decision-making: if young people understand basic financial concepts, from inflation and interest rates, to stocks and shares, or how banks operate, will they be less likely to take out payday loans, max out their credit cards or take out unaffordable mortgages? 

You could easily argue that financial training didn't prevent bankers from excessive risk taking. Then again, until this year, financial advisers weren't required to hold more than the equivalent of an A-level in finance.

I remember once speaking to Christopher Jones-Warner, who teaches communication to wealth managers. He said that at his training sessions for financial services personnel he asks attendees to raise their hands if they"have a financial plan" are "working that financial plan" and therefore "expect to retire comfortably." He estimates only around 22 per cent of his audience raise their hands. If professionals aren't planning their finances sensibly, what hope is there for the rest of us?

This makes me wonder, perhaps the problem isn't one of formal financial education, but something more informal and more difficult to teach in a classroom— a question of ethos. It seems to me that it's more important that people are less reckless when it comes to taking on debt, than that they can tell an examiner what a derivative is.

This article first appear on Spear's.

Drive for financial literacy. Photograph: Getty Images

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

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Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.