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.

Nice cutting of what HipsterCoffeeShop, actually said, which was to locate the responsibility for life skills in the hands of their parents.

And your leap to disruption/disengagement and lack of literacy numeracy skills. By your weird logic pupils thirst for financial planning, best pension advice and are pissed off they're not getting it.

@sashh

I agree. There are children in poverty in this country and it is a social failing (not that this has had much mention in the conservative leadership contest).

How though do you decide which pupils would most benefit from numeracy lessons? Would they be targeted at those on GSM for instance? There could be potential scope for stigmatisation. Schools advocating
unions may help but again you are getting previously close to imposing a political opinion.

I guess of a lesson prevented a child getting hideously into debt in future that may be viewed as an act of compassion but numeracy lessons on their own won't combat systemic deprivation and poverty in this country sadly

@mids2019

Do you have a pension, do you also have a personal pension and do you invest?

The last labour government admited it failed it's pledge to ease child poverty.it openly admited that.

However the money they tried to give out to start parents investing for the children was a great idea.

Unfortunately the credit crunch put paid to that.

Re which ones to teach, you are the one trying to devide them up.

You teach them all.

Don't agree to be hones

Don't agree to be honest. Pension advice when I was in school is now redundant, you very rarely get final salary pensions now. You need to stay up to date on pensions really, and that's what pension advisors are for.

@ILikeHotWaterBottles .

But if you open up a sipp now for your child, and put small amounts in ,that will have time to grow into a decent pot by the time they are older.

Anything else they would get is a bonus.

I keep meaning to open a sipp for my DC and when they start to work they will put small amounts in.
Very small amounts.
I wish I had done it ten years ago!

So you've known for 10 years, but you still haven't made one? So people telling you about it hasn't made a difference as you still haven't done it.

I think this thread just shows the value of being able to research, analyse the information and make a decision based on what is best for you. Schools need to give children these tools and open the discussion on financial planning but there is no right answer for everyone.

A few people have mentioned opening SIPPs for there children but personally I don’t see the point. My savings priority for my children is for university. SIPPs don’t have any tax advantages for children (as they are usually non tax payers) so personally I wouldn’t bother. But it’s clearly important for others.

@RockandRollsuicide

I have a defined benefit NHS pension, my partner has a private pension the contributions to which are advised upon by a professional. I do invest. I do own my own home.

being in this position was a result of us both going to university and having opportunities in my opinion. Reasonably paying graduate roles led to the financial conditions where we were in a position to invest.

However, some of the goals above won't be acheivable by everyone and I simply saying you need to be conscious of that.

Numeracy teaching at school from this thread implicitly suggests it is a means to allow working class kids to avoid making decisions that could lead to financial black holes. I think there may be an argument for this from a compassionate perspective but it should not in general be a role of a school to teach children to become wealthy?

I think the most useful thing that schools could teach kids, is the idea that you can't learn everything you might possibly need to know throughout life before you leave school at the age of 16/18, and that you are going to have to learn things yourself throughout your life. And equip them with the skills to do that.

Schools do that. That's what they do.

It's called education.

This.

It's why I can't be doing with the whining of the OP that schools should have told her what to do in a situation a child could not possibly imagine, i.e. being on maternity leave.

Fucking grow up. Own it.

So how many 15 year olds in the middle or low ability groups are 100% engaged with simultaneous equations, SOHCAHTOA, matrices? How many are 100% engaged with analysing a Shakespearean play or Seamus Heaney poems?

Around 50% of 16 year olds don't achieve functional literacy and numeracy, so they're hardly engaged with the more "academic" side of things either are they?

Perhaps teaching more real life stuff will actually aid engagement and reduce disruption if pupils start to see that what they're being taught has real life relevance?

I've set up stakeholder pensions with Standard life for my 2 DC. (15 and 12) we're saving £20 a month into them which gets topped up by tax relief to £25 pm.

We're using this to have conversations with the DC about the pensions and savings.

That particular product has a minimum payment of £16 in case anyone else wants to look into it for their DC. (Please check all the details first!!!)

Mids, sex I asked if you invest because you don't seem to understand it.
Children today may not generate the kinds of extreme wealth you talk about in your posts by the time they reach adult hood.

But if teens were taught the disapline of investing now,even very small amounts will add up to a good pot. They have the power of time on their side.

It's not an all or nothing situation.

This is how you are presenting it.

You don't need good maths or a degree to be financially stable.

*sorry don't know where random sex came into it.

No point in trying to teach it in any detail but I think they should be told several times over throughout school/college/uni that when they start earning they should start a pension and pay into it without gaps if at all possible.

There was a good example kicking around on the internet showing how a small regular investment from the age of 19 can accumulate to a pension pot of over a million pound. That may prick their ears up.

@mids2019

How though do you decide which pupils would most benefit from numeracy lessons?

How do they currently decide which pupils would most benefit from SOHCAHTOA, pythagoras, pi, simultaneous equations, matrices? They don't - it's taught to everyone, despite probably 95% never having to use them once they leave education.

Personal finance lessons would be basic, i.e. that there are different types of pension scheme (i.e. defined benefit and defined contribution), that there is a state pension and occupational pensions, that you gain "credits" for state pension mostly by working and paying NI. The detail and rules don't need to be taught, just the "headline" key points.

Likewise proper illustrations, via simple graphs and spreadsheets of the impact of only making minimum payments on a credit card - no need to go into the detail of the algebraic formula which isn't understandable by half the pupils, just the fact that if you buy something on credit card for £100 and only ever pay off the £5 per month minimum payment, it'll end up "costing" you maybe £200-£300 because the interest may be £4 per month (the detail isn't important, it's the fact you end up paying multiple times the cost of the item that's the key feature).

How about the times when high charge payday loans are a good idea and the times when they're not. Again, not the detail, but the general principles.

How about highlighting the effects of compound interest on savings/investments? I.e. simple graphs/spreadsheets showing the impact on drawing and spending a dividend on ICI shares as opposed to reinvesting the dividend to buy more shares, thus increasing the investment and increasing future dividends?

How about teaching of the effects of default, i.e. not making loan repayments, bounced payments due to lack of funds, walking away from leases or car loans, etc. Again, not the detail, but key features of the consequences of bad credit history, i.e. not being able to get a mortgage, only being able to get credit with higher interest rates due to risk, etc. Bank charges and other default fees if you don't make a payment on time or you have to use an unauthorised overdraft.

It's not a matter of doing the same kind of detail that would be advised by a finance professional, such as an IFA, it should be just the fundamental basics and they DON'T change over the decades. Reinvesting dividends rather than spending will be just as valid in 30 years as it is today. Paying more than minimum payments on a credit card will still be the best thing to do when you're 60.

It shouldn't be about making "rich" or privileged people wealthier, it should be aimed at people to help them avoid getting into financial difficulties - a completely different "audience". The "audience" who probably don't have good role models in their families so have no one at home to tell them the basics!

Kazzy, don't forget setting up their own personal pension as well ,that they control!

A sipp.

This is hugely empowering!
And so easy to do!

It's one of the least complicated of the pension model's.

If they did it young enough as pp said it could build into a significant amount because they have time on their side.

With small amounts.

@RockandRollsuicide

Children today may not generate the kinds of extreme wealth you talk about in your posts by the time they reach adult hood.

It's just as important to teach them the basics to stop them falling into a life of debt, poor credit ratings, bankruptcy, etc. So many people in their early twenties face an uphill struggle because of mistakes they've already made, and that can affect the rest of their adult lives. Digging yourself out of a hole takes a lot more time and effort that not falling into that hole in the first place!

Around 50% of 16 year olds don't achieve functional literacy and numeracy,

Where do you get that from?

• also kazzy they need to know that defaulting on payments can lead to a note on credit file meaning can't get a mortgage etc

I don't get this argument. Where is the personal responsibility in teaching yourselves the things they DO teach in schools? Why does it only elicit this response when people suggest teaching more practical things?

No I agree, I'm not forgetting, but unfortunately, from experience with my clients, it's one of the things people start with good intentions but one of the first things they stop when times get tough. That's why I'm so in favour of workplace pensions, as a deduction from wages seems "more important" and less easy to stop, than a standing order to a personal pension scheme. Automatic enrolment is a very good thing.