Finances and pensions need to be taught in high schools

[MutterlyClueless]

I am lucky in that I have a defined benefit work pension (I know they are a rarity these days, so think myself lucky). I pay contributions and my employer pays a higher amount.

All good, apart from the fact that I could have retired at my scheme pension age and received my pension, but instead continued to work a few more years to achieve a higher pension.

I thought because I had unpaid maternity leave and worked part-time in my career I needed to work longer to boost my reckonable years and pension amount.

But I now think that in some cases a bird in the hand is better than one in the bush.

Am I the only one that didn't understand the pension choices and carried on working full time when I didn't need to?

Pensions of all kinds should be on the curriculum in high schools and colleges along with other courses about finances to help people stay out of debt and plan for their future better.

This year, after SATS, I did several weeks worth of maths lessons about life finances with year 6.
We looked at wages, tax, bills, housing…
They absolutely loved it! A lot of valuable maths and SO many fascinating debates and insightful questions!
It was amazing.
I’ll definitely be doing it again!

Fwiw, set up a sipp (self invests personal pension) for your DC now.

You can do it from birth. It means you can add very small amounts ( aside from initial investment usually 100), and get your DC
hugei returns by the time they can use it.
If it's already set up for them it also means it's there ...they have a Saturday job? They add £5 to sipp and £10 to their ISA.

And some to other normal savings.

@RockandRollsuicide

Give a kid 5 million to invest and they could live off the interest?.Granted not many are in this situation but inheriting family wealth and investing is a great way to not have to work and entrench privilege in society.

I just think getting kids to be finance aware too early needs thinking about

Smarite that's wonderful. We need to start early you can't just spring this stuff on older children and expect them to have interest!

I saw a lovely pm to of Rishi Sunak and his children. I wonder if they would enjoy learning about debt and adding £10 to ISAs

@mids2019

Sorry but I don't agree at all!

What a strange way to think!

We need to arm all DC with general knowledge about growing money..

It's been said that one of the greatest difference between rich and poor and even men and women when it comes to money is knowledge of investing.

Because 99% of parents are lazy idiots and can barely look after themselves and expect school to teach children everything.

Sorry mids I don't understand your posts?

Zues.

They are some of them lazy idiots and many of them just don't know.

So why do schools teach anything at all then? Why "teach" religion, contraception, music, arts, cooking, but not personal finance. Most of what schools teach is just momentum based on what used to be taught in the days when it was only the academic who went to schools. The subjects and the curriculum has barely changed in 50 years despite massive societal and technological changes.

Yes, not even investing I would say. Just basic money like spend less then you earn. Don’t count future earnings, count what you have, learn about compounding.

Save 1/3 of each month and use that to deliver a percentage of your next years pay.

So much to teach, very little know it.

So by the same logic, how about removing trigonometry from the curriculum because all 99% of the population will ever need to know is easily available via google or apps! At least most adults need to know personal finance issues whereas probably less than 5% of adults need to know it in their jobs!

I know loads of schools that cover this in EP lessons

Lydia.

My relative is a teacher and she said some people teaching this are in debt,they over spend they don't know what budgeting is.

They don't know about ISAs and have taught that ISAs give 0.1% and had to be locked away for a year.

Also no teaching on banks selling stuff...on avoiding defaulting on over drafts at all costs etc..

She said it was embarrassing.

@RockandRollsuicide

I think there are good intentions in terms of teaching finance to children but there is a large socio economic range to teach. I brought the extreme example of Rishi Sunak's children to show that some children may not need financial education in the way you defined.

I think often in these discussion s financial education is used as a sticking plaster to prevent systemic generational poverty in this country. I know many at our local school would be slightly hesitant having their children discussed their family finances openly.

A finance lesson may open up the eyes of a child to the fact they have poor parents and schools should be very careful about stigmatising poverty. Some children may use food banks (or their parents do); how do you integrate food bank use into a lesson or the presence of loan sharks?

Affordable debt is different to unrealistic debt. High interest is one of the reasons people on low incomes fall into poverty. We need to teach teens not to borrow from high interest companies, like certain stores, but perhaps to save in a credit union, which lends small amounts at reasonable rates.

There ought to be charts that demonstrate that getting a job is generally a better option in life than claiming benefits (I know disability and illness will preclude some),as to leave Education and do nothing is dreadful. I know two teens like this, their parents’ example is to get what they can from the system.

Are these lessons going to be taught at Eton? Isn't there a little tinge of 'oh we should teach poor people about interest rates and poverty can be eridicated?

the causes of poverty are complex and I think it is a little disingenuous thinking lessons on credit card management is necessarily going to have an impact on lives.

Having lessons in finance and pensions I agree with. Learning about money and hopefully as a result making some sensible choices cannot start too young.

Yes, that is very likely to be the case.

@balalake

I think the problem with pensions is that there are some in society that will literally not have enough to save into a pension if they are working a minimum wage job and have ever increasing energy bills. A lot will rely on the state pension for what it's worth.

what constitutes a sensible choice. A sensible use of money is very subjective. Is giving half your salary to charity a poor choice or an act of altruism? Should money be invested and if so where? To my mind investment is a personal choice and responsibility and the ability to search the market for good opportunities is a matter for personal initiative and not necessarily the topic for a school.

Is there?

There, I've done it again, not done enough research and not used enough critical thinking as another poster pointed out. 😏

@chuggabo
"At the moment my retirement plan involves a bottle of vodka, a Leonard Cohen album and a rope".

If only you had saved more, like me. Then you would be able to go for one way flight to Switzerland. Economy flight, midweek, obvs. My friend who saved loads is going first class!

Only the multimillionaires can afford to actually retire these days!

If I had been taught about pensions in secondary school I would have been taught:

Married women can pay a reduced rate pension
Married woman can claim on their husband's paid contributions
Women can claim their pension at age 60

OP, please can you advise what the pension position will be when the current crop of 14-18 year olds retire?

We do teach finances and pensions, infact in year 10 we have a group of bankers who come in to do a weeks worth of outreach workshops. They go through features of payslips, mortgages, savings, interest and pensions and things like that. Ofcourse, the students aren't particularly interested as it isn't relevant to them at that moment in time and they will never remember by the time they actually need it..

Many banks and other financial institutions have designed online programmes for all ages to help educate people. It is accessible you just have to want to educate yourself.

My employer runs regular courses for people nearing retirement age to help them make those sorts of decisions.

All well and good advising young people on the benefits of starting a pension, but the detail as to when is best to retire is surely better explored much further down the line