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.

Yes my students found learning about store cards / credit cards interesting. It was difficult for them but once they saw real life examples of amounts having to be paid back they were horrified

Everyone needs to prepare their finances for retirement - rich or poor. Withholding basic financial information isn't helping anyone & could lead to more shame later in life (when it may be too late to do anything about it).

If I'm understanding you correctly, you're suggesting that anything that is open to interpretation & doesn't have a clear black or white answer shouldn't be taught in schools? That would slim down the curriculum dramatically!

@RockandRollsuicide

Oh inheritance especially property is still a thing in 2022.

You say monetary advice will be of value to children in the future and there is an argument there but different advice will be relevant to different pupils.

One pupil may need information on filling in universal credit forms, deciding on appropriate social housing, identifying the cheapest means of using public transport etc.

Another pupil may need advice on equity management, choosing a financial advisor, tax efficiency etc.

We do not necessarily know which student will require which but it is more likely middle class pupils who will benefit from inheritance will need the latter.

I still just feel monetary management is too complex and contentious to be fairly covered in depth in a school setting. I think there is a philosophical question here to about how much right the state (i.e. a school) has to dictate how we live our lives and spend our money. Yes people may make bad choices but is it up to schools to tell us what choices we should make?

Doesn't this assume that poor children will always be poor, when in fact providing investment advice is one potential route out of poverty?

@Q2C4

I think care has to be taken when teaching nuanced subjects in school. Nothing is black and white in life and so on finance but one could argue that if the advice given in monetary management classes is uncertain should it be taught? How do you advice children on whether to fix a mortgage or take on a variable interest rate? It's a gamble on the future of interest rates and a complex gamble? How do you know how much to contribute towards pension as it depends on how long you will live and that is actually difficult to calculate (actuaries get a fair amount doing such things)

If you are teaching history for example nothing is black or white but the subject being studied does not immediately effect the pupil. Looking at different materials source materials on the industrial revolution is complex but importantly misinformation of the information will not be of such immediate relevance.

I think you are over complicating it mids and I don't think it's wise to say to any child... you won't ever make enough money so here are the details on how to fill out a uc form.

If our children, all of our nation's children were able to invest from an early age into sipps and ISAs, imagine how incredibly empowered everyone would be!

I can't remember if it was Blair or brown but they tried to do this by giving DC 200 each to invest.

A recent thread starkly showed up the difference between those that know about stocks and shares investment and those that put it into a bank.

The ones who put it into a bank had nothing much more to show than the initial 200 because bank interest rates are so low.

But those who invested it had made several hundred pounds more.

Obviously those who added in both situation had lots more but those who added to good investment made much more.

Can you see MDS even in this situation whose dc are better off?

Why on earth would anyone want to hobble and hold people back.

@Q2C4

It would be a wonderful world indeed if everyone had a way to invest themselves out of poverty. The grim(?) reality of the world is that it is a.lot easier to invest when you have money to begin with and you can afford to take the risk.

If I have 5 million to give my child and they invest at a 10% interest rate then they would have 500K per year from interest with no real need to work. Apart from the unfairness of this situation do you think investment methods are a truly useful topic in schools or are those methods dependent on your initial wealth?

@RockandRollsuicide

Remember the value of your investment may fall as well as rise. You can only risk what your prepared to lose in investment to a certain degree.

The expanse of a saving fund for children I think has merit and compound interest is a beautiful thing but you have to admit the amounts are relatively small. Investment of significant amounts of cash may be an option for some but not all. In some ways investment knowledge will not assist someone in reality to escape poverty on its own.

However contrast this to the child who will inherit their parents' 1 million pound house and possibly has been gifted money before then. The child will hopefully make sensible investment choices on this larger some of money with truly life changing ramifications.

I think the advice though well meant will highlight the features of our glorious capitalist system....I just think you need to be careful doing this.

Hi mids.

Your thinking is very extreme. You talk of children in abject poverty and those with million's. .

That's the point of investing early because actually small amounts do at up with compound interest. That's the entire point?

I feel you are determined on this and clearly advocate a different sorts of society, perhaps like the people across Eastern Europe were forced into and then tried desperately to escape..

They weren't allowed too of course because they had to pretend it was amazing?

It's a very sad way of thinking to keep children in poverty poor. Surpress everyone especially the poorest by robbing them of information..

You sound like my daughter old headmistress!

@RockandRollsuicide

I think there is some obviously good advice for children regarding finance. I think the thorny question is how and by who it is delivered. Simple compound interest is a good concept but beyond that financial decision making gets quite complex and risky.

There is wealth disparity in this country and I wasnt talking about absolute extremes when talking of million pound houses and universal benefit claimants. I also wasn't hopefully advocating communism just making a point that wealth disparity is a complex issue with a lot of pointed opinions. Wealth disparity does also have an impact in people's financial decision making.

I don't think it's about keeping the poor poor. Poverty though is in my opinion a symptom of our economic constructs and won't entirely be eradicated by financial education. Yes teach some basics to children (possibly as part of maths) but always with an awareness that it is a human subject as much as an abstract mathematical one.

@RockandRollsuicide

If information is a concern maybe kids could read some Labour party leaflets?

Compound interest is a great topic for relating to real life, you can look at things like mortgages, store cards, savings accounts etc. and compare what you borrow vs what you pay back, or what you pay in vs what you get back.

For the teachers here, I like using this lesson. It's a bit dated as fewer children know of Futurama nowadays.

threeacts.mrmeyer.com/frysbank/

@HipsterCoffeeShop

Schools have better things to do than teach kids about life

And then people wonder why so many kids become disruptive and disengaged and nearly half leave without an adequate/functional grasp of numeracy and literacy.

So, teachers think that analysing a Shakespeare play or trying to teach simultaneous equations or teaching them to read lines of music is "better" than teaching basics about tax or pensions?

Even though the majority of pupils will never even watch a Shakespeare play or need simultaneous equations in later life!

I think schools/teachers have lost their way if they seriously think like that!

In the typical Maths lesson in year 10/11, compound interest is all about the algebraic equation, so the kids who can't "do" algebra have long since switched off.

What you've found to teach is brilliant and a breath of fresh air compared with the traditional, boring, disengaging way that lots of teachers prefer.

They already are. Financial literacy was added to the curriculum as part of PSHE (I think) or Citizenship about 10 years ago by Michael Gove.

Not this again! Schools do do some of this but the curriculum is pretty jammed and it’s the kind of thing students don’t really absorb in the abstract anyway.

Compound underestimates like a good way to introduce exponential functions?

I think if anything PHSE would be a suitable lesson for such things as you can financial literacy as potentially impacting well being. It then indicated to parents that the lesson may be something that they would to look at the content of in the same way as sex education.

There is still a feeling on this thread that life skills should be taught as an alternative to traditional subjects to disadvantaged students while middle class children should wholy focus on your standard curriculum.

Knowledge of English Literature can lead to degrees at Oxbridge etc in addition to abstract mathematics. We should not write off disadvantaged children as being non academic.

Another point is that you would be aghast if schools filed childre n if and when to have chikdren. Having children had a massive impact on your financial status, pension decsions, life insurance necessity, household budget etc.

there are really limits to what're state can tell you in terms of life decisions.

I think you can introduce this earlier (the year 6 lessons sounded interesting) but 16+ is the right age. A good sixth form will offer Business and Economics, and Young Enterprise. Students get a lot of value from Young Enterprise. There's also an AS equivalent course in personal finance some schools offer that is very practical.

I do think teachers need more support and training to deliver PHSE on personal finance further down the school. Barclaya Money Skills is a good resource. Teachers are sometimes not very financially clued up themselves - there are often threads on here from teachers who didn't clarify the wage before signing their contract, haven't looked at their school's pay policy, don't understand the pension - which to be fair is increasingly complicated). Etc.

But poor people are exploited by companies that lend to people who don't understand how finances work.

I remember the days of the 'provy cheque' it's now pay day loans. But they are not always the worst idea, you have to be financially literate to know when a loan is appropriate.

I had a situation where an overdraft was withdrawn a couple of days before pay day, that meant I got charges the next month, that hit just before pay day, taking me overdrawn. A pay day lone stopped the spiral.

I once bought a washer from a catalogue making weekly payments (anyone remember 'club books') the washer cost more than buying in a shop, but the shop interest rate for credit meant I paid less overall.

I think if you want to interest teenagers in money and finance they need to be receiving some. We did have ESA and child trust funds, and the research on the child trust funds showed that some of the poorest parents were adding to them.

I'm also old enough to remember school bank accounts and banks coming in to schools to talk about finances / banks / hope you picked them to bank with as an adult.

Users

The other problems is that students who can't or struggle to grasp algebra etc may feel that investing isn't for them or any stuff like that.

I didn't do well in math at all but I've managed to grasp investing.

People like me shouldn't feel we can't do it because we struggle with math.

I need very very little maths, what I do need are research skills.

I invest.

Mids,do you actually invest?

I was explaining some of this to my 9 year old yesterday in fact!

I drew a little diagrams to explain investing in one company and the risks or investing in lots eg index funds .

She knows the companies like Tesla, apple, Microsoft so I was able to show her how we hold a minsicule fraction of those shares. The platform has really easy visual guides that at 9 she could understand.

Eg a circle with 80% shaded red for equity and 20% shaded green for bonds.

I'm no expert,my knowledge is still very basic but when people have been deploring low interest rates, even through covid my investments never dropped below 10% and they usually hover around 30%.

Sash

It's a shame the child trust fund stopped. It was a good idea but unfortunately not enough was said about investing the money into stock's and shares and even then the choices were limited.

I do think teachers need more support and training to deliver PHSE on personal finance further down the school. Barclaya Money Skills is a good resource. Teachers are sometimes not very financially clued up themselves - there are often threads on here from teachers who didn't clarify the wage before signing their contract, haven't looked at their school's pay policy, don't understand the pension - which to be fair is increasingly complicated). Etc

Yes, training in any new topic is a good idea, but your reflections on their personal circumstances are out of order. Your own house doesn't have to be in order to convey information effectively.

Ever been cared for by an overweight nurse or doctor?