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.

*kazzy I totally agree.

The extortionate amounts of hire purchase was drummed into me at school. I couldn't believe it,it's something that really resonated with me and made sense.

These things go hand in hand..
The main motivation will always be that people want more money.

@karmakameleon

We are doing junior stocks and shares ISA for university.

It can be both even if you invested 50 a month for uni and less for the sipp it's the time factor it has to grow..

It's something small that parents can do by putting much less in for it. It's time that helps to reap the rewards.

@ILikeHotWaterBottles

I didn't say,I had this knowledge ten years ago and I' didn't act on it.

I didn't have this knowledge ten year's ago and I'm fairly new to investing.

I wish I had this knowledge ten years ago. But there is still plenty of time to get them going.

Lots of sobering statistics on the National Numeracy Day website.

56% the working age population scored less than the level expected of a primary school child in numeracy.

Only a fifth of the working age population had the numeracy level equivalent to a grade 4 at GCSE.

Those in older age groups tend to be more numerate than in younger age groups.

Levels of numeracy in the UK are low compared to international standards.

But hey-ho, let's just carry on teaching Maths in the same way we've been teaching it for the last 50 years and heaven forbid anyone suggests making it more relevant to modern society. After all, learning SOHCAHTOA is more useful for real life than personal finance isn't it?

@RockandRollsuicide

The point is that different solutions are right for different people. Schools can’t teach children how to manage their money. They can (and do) give children the tools to research their options and make the right decisions for them.

Again, we chose not to open junior ISAs for our children. We were worried that they would be given access to a large sum of money aged eighteen and we would have no say in how they used money we saved for them. For us it was better to save in our own names and retain control of the funds but the down side is that we pay tax. There are pros and cons to every decision and each individual needs to understand what will work for them.

They can go for all three and getting teens or even younger to have an investment pot they can't touch is a good thing

Karma yes I totally agree.
Something happened to us re juniors ISA and we didn't get the choice.
That's one reason I've started to drill mine now to learn how to manage their money.

The fundamental basics are however to get into the discipline of saving, into different places for different needs and yes poorer children and children from wealthier homes should all be taught as well as debt issues.

Interestingly kazzy I'm probably one of those lower maths statistics.

But I do remember the lesson about hire purchase!
Nothing about much else.

But you still haven't done it. You're telling others to do it, but haven't done it yourself. It's not going to benefit your kids until you actually set it up. Rather than wasting time telling us to get it done, go and set up accounts for your kids. 🙂

@jazzy
@Kazzyhoward

I agree that a lot of what you stated makes sense in terms of brief neutral 'headline' advice. However I pick up on your point that the intended audience are those children most likely to come from deprived home or enter deprivation themselves. I think for a lot of good intentioned people (including teachers) numeracy lessons offer a hope that deprived children can avoid some of the pitfalls of their families. This could be valid but we should be honest that schools having compassionate people in them have taken it upon themselves to counter shortfalls that are possibly due to lack of parental input. I think we should reflect whether this is necessarily ideal.

I think numeracy shouldn't take a huge amount of time in the curriculum and pointers could be given to external agencies. I quite agree that financial management lessons should not go to the extremes of choosing individual share portfolios or general 'wealth managment'.

I still think lessons such as this have to be sensitive to the audience and a teacher has to be aware of the social background of their class in much the same way as a maths teacher is aware of her pupils' mathematical ability. Bullying in school can result of rich kids mocking the poor (and vice versa) and I think there needs to be thought given to this as well.

I bet £5 added to my DCs pension every month because of the tax benefits pensions get. Stakeholder pension.

Surely that's what schools are there for - to (attempt to) give a basic level of understanding and education for all, regardless of pupils' backgrounds. Some children are taught to read at home - doesn't mean that schools shouldn't teach literacy too.

Schools shouldn't give any specific financial investment advice - that sort of advice is too fact-pattern specific and likely to be irrelevant by the time children leave school. Giving detailed financial advice is a regulated industry.

However, schools can teach the basics of compound interest, mortgages, pensions, hire purchase, credit cards, car financing deals etc, ie, the most common financial considerations on the key things that most people buy at some point in their lives. they can also highlight the fact that the government incentivizes certain types of saving via tax relief, and that whilst investing is by no means risk free, with inflation running at 9%, leaving money under your mattress isn't either.

You can't teach about all types of pensions in high school.

When DD started her job last year, she was given a choice of four types of pension. There's no way she would have retained any knowledge from Y10 or Y11 when she finally needed to make a decision age 22.

The key education about pensions is to get one . You worry about the details when confronted by them.

@Kazzyhoward But surely the reason most adults aren't very numerate is that they have forgotten a lot of the maths they learned in school, not that they were taught badly? If you don't use it, you lose it. Many people simply don't have cause to use maths on a regular basis. I certainly don't.

I'm a (non-maths) teacher. I got an A at maths GCSE in the 80s. When I was doing some supply teaching and covered maths lessons, I realised that I had forgotten virtually everything I ever learned, and not just the more abstract stuff. I'm an intelligent person with a good memory, and I was certainly taught about compound interest at school. I wasn't remotely interested and can't remember how it works!

I just think there is a huge mismatch in what adults seem to think children can be taught to remember (for good!), and what little adults admit they remember from their own French, history or chemistry etc lessons at school. And I don't think people necessarily remember useful or life-relevant things better than anything else. People remember things that catch their attention or imagination - not really something that can be said about pensions or compound interest!

@Fairislefandango

But surely the reason most adults aren't very numerate is that they have forgotten a lot of the maths they learned in school, not that they were taught badly?

The numeracy rates are lower in younger age groups so that kinds of torpedoes your argument. You'd expect numeracy ability to reduce with age if people were forgetting things, but the opposite is true. The older demographics are more numerate as per the National Numeracy Day website.

Another point is that "Maths" and "Numeracy" are very different things.

As for what is learnt in schools, typically less than 50% of 16 year olds gain a grade 4 or above in GCSE Maths, which suggests over half of school-leavers never even had a good degree of numeracy in the first place, rather than them forgetting it over time!

@Fairislefandango

People remember things that catch their attention or imagination - not really something that can be said about pensions or compound interest!

No one expects them the remember the compound interest equation. It's enough to remember what it means, i.e. interest on interest. Likewise no one expects people to remember tax rates or pension contribution limits, it's enough to know there are different types of pension schemes, there is some tax relief (not necessary to remember rates etc), and that there are different retirement ages between occupational and state schemes (again, no need to remember, but useful to know they're not the same). Key features are all that's necessary, not forcing pupils to rote-learn huge amounts of data.

Likewise if, for some strange reason, I needed to know how to calculate the volume of a sphere, I wouldn't remember the equation, but I'd know that there is an equation and how to calculate it, i.e. what dimensions to measure and how to put those dimensions into the equation (but in reality, I'd just download an app!).

Finance and budgeting aren't maths though? Or the parts that are ARE taught in maths, percentages, compound interest etc. Maths is a skill that helps you to budget and if you give over even more time to concepts that can be easily googled, people aren't going to have the skills to apply that knowledge when the time comes.

Numeracy would likely be a lot higher in this country if the older generations didn't insist on perpetuating the myth that what you learn at school is useless just because they happened to find maths hard.

The numeracy rates are lower in younger age groups so that kinds of torpedoes your argument.

Maybe that's not entirely down to the way numeracy is taught though. Maybe older generations remember better because they were more likely to have relied on their maths than to just look things up on the Internet or use the calculator on their phones, so they didn't immediately get out of the habit of using their numeracy once they left school.

I know very little about teaching maths, but I do know about teaching and about how kids learn. I am very unconvinced by the idea that children would do better at learning or remembering lessons about personal finance on the basis that they are more relevant. Personal finance might feel very relevant to a 30yo. To a 14yo... not so much.

If you have poor basic numeracy, you're really going to struggle with "Maths" aren't you?

If you don't know your times tables, first few prime numbers, you're really going to struggle with algebra, i.e. simplifying, manipulating and solving equations.

If you don't fully understand percentages, you're not only going to struggle with "Maths", you'll also struggle with some elements of science.

Numeracy comes before "Maths". Perhaps it's poor numeracy that means so few people do well at formal "Maths" lessons/exams in later secondary school years?

Perhaps also it's the way that things are taught that's the problem, i.e. the complicated compound interest equation will be outside the ability of a pupil struggling with algebra, but if you showed it as a graph or table showing how the interest accumulates and total cost of borrowing, it may bring it to life and plant a seed that compound interest is usually not a good thing and paying it off sooner saves a shedload of interest in the long term!

It's like how crazily high numbers of people couldn't understand exponential growth in the covid pandemic.

Likewise if, for some strange reason, I needed to know how to calculate the volume of a sphere, I wouldn't remember the equation, but I'd know that there is an equation

Even if you'd never known there was an equation, you could google how to calculate the volume of a sphere. I know I'm being awkward... But the question of how valuable it is to spend time teaching factual, easy-to-look-up information is quite a tricky one imo. Not least in my own subject (mfl). You can look up anything on Google translate, but it's not the same as being able to speak the language!

I think some other posters made a good point, that maybe the skills and concepts around budgeting (rather than the actual numbers), plus the skill to research things properly, are most valuable.

So why teach how to calculate the volume of a sphere in the first place? Why make pupils remember the formula?

And I keep coming back to my other point. Why teach it at all when a tiny percentage of pupils will ever have to perform that calculation in adult life, i.e. only the ones who go onto engineering/science further education/careers. In that case, why not include the sphere volume calculation as part of the degree course?

This is the thrust of my point as to just who decides what should be taught in schools. It's not really changed in half a century. Society, technology, the jobs market, etc has all changed dramatically, but schools are still spending lots of time "teaching" things that they don't need to teach anymore, either because of Google/Apps or because everyone now gets the same education, whereas 50 years ago there was a difference between "academic" education aimed at potentially professions, and "technical" education aimed at trades. We now have a "one size fits all" approach which clearly doesn't have enough time available to teach everything required for the new, more technologically based, adult life we have now.

Agree - all kids need to know is that they exist and are a tax efficient way of saving. No point getting any more specific than that.

Re catching their interest.

A pp pointed out some internet thing stating that small regular amounts invested over X year's could become a million.

That is not beyond the reach of any teen!

They just have to start. Most teens/people want money and to feel in control in life not always in the back foot.

Many don't bother because they feel hopeless like they never can.
Lots of very simple graphs and illustrations on it. Lots of inspiration speakers on it as well.

Imagine a hopeless feeling young teen , from a deprived background encouraged to start a sipp and when they get to 30 a nice amount is starting to build!

Kazzy I'm totally with you.

I think the curriculum should concentrate on the absolute basics, tables, adding/subtraction/ division etc.
Create a path for those who want more maths or may need it for future career.

All DC should have the debt/life skills training and be armed with the knowledge 0f how to budget and save.

We are crushing students by forcing them to concentrate on this pointless rubbish we really are.

And we don't arm them for life which is the saddest thing and it's so so hard to motivate them over this.

I think it is relevant how confident teachers feel with these topics personally and professionally. At the moment 'enterprise' is on the PHSE curriculum but it's competing with masses of other stuff -- the relationships and sex content takes a lot of that time. In the schools I've taught in, unless students actually take one of the "businessy" subjects, their contact with anything to do with enterprise/finance might be an occasional visit from an outside organisation. It's only human nature to be more enthusiastic about and advocate for topics/subjects you feel confident about. There has been a lot of advocacy for this from outside schools (including this thread and the one the other day) but maybe not as much inside.