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Media centre /
Press releaseFINANCIAL EDUCATION FALTERS DESPITE PARENTS’ BEST INTENTIONS09 September 2005
In the current financial climate, with rising personal debt, high house prices and a lack of long term savings causing anxiety, it is more important than ever for children to learn the value of money. However, the National Savings & Investment (NS&I) Summer Savings Survey1 reveals that while parents increasingly recognise the importance of educating their children in financial issues, over a quarter (26%) of all parents have not discussed any money matters with their children, including concepts such as the value of money and how to earn it. Subject matters Although most view financial education as a parent’s duty (94%), only 74% of parents have actually talked to their children about money. And even those that do talk to their children about money often overlook key subjects. Less than half (48%) of the parents have talked to their children about budgeting - possibly the most fundamental of financial skills. And despite the increasing availability of credit cards and stories of unmanageable debt, these subjects also seem off the agenda. Less than a third (28%) of all parents have discussed issues relating to credit cards with their children, while a mere 35% have talked to their children about debt (see figure 1 below). Slightly more technical topics were discussed by even fewer parents, with only 21% talking to their children about interest rates and a small 14% explaining the effects of inflation. Top 5 subjects parents are most likely to talk to their children about
Good intentions Parents believe that children should be taught about money matters at a young age, with 82% of all parents considering 10 years or younger as the most suitable age to teach their children about financial matters. Yet despite this early emphasis on personal finance, money is a subject which parents still find hard to talk about. In fact parents would be happier discussing sex than money: 63% of parents have broached sex education with their children, while only 59% have told them about savings and less than half (48%) had found time to discuss budgeting. Lack of knowledge One of the reasons parents put off talking to their children about money matters may be because they do not fully understand or feel comfortable with some of the financial concepts themselves. Recent research2 from NS&I showed many adults are confused about concepts such as inflation, with as many as one in six (16%) Brits unaware that inflation affects everyone and two thirds (67%) confessing they have no idea what the current rate of inflation is. Almost a third (30%) of parents questioned said they ‘just picked up’ their financial knowledge but this suggests they might have only picked up enough to get by, without really understanding some more difficult concepts. With one in four parents not passing on any financial education at all this cycle looks set to continue. Mum takes the lead Most parents (88%) believe that it should be both parents’ responsibility to educate their children about financial matters but in reality only 64% of parents find that this was actually the case. In reality, parents believe the task often falls to mothers alone. A fifth (20%) thought mothers were the key educators compared to 3% who put financial education down to fathers. The importance of women’s role in teaching children seems to have grown significantly, with the number of mothers educating their children about finance more than doubling in a generation. Only 9% of parents questioned by NS&I were taught about money matters by their mothers whereas today 20% of mothers are the primary financial educators. Getting involved Dax Harkins, senior savings strategist at National Savings and Investments, comments, “The NS&I Summer Savings Survey reveals that although parents have good intentions, a significant proportion are failing to talk to their children about money. With the financial pressures on the younger generation greater than ever, it is vital that we help educate children on money matters. “There are many ways to get children involved in savings and to make them realise what money is worth, whether it’s using a piggy bank to make them save for things they want or investing in a children’s savings account. With the easy availability of credit and challenges like getting on the housing ladder getting even tougher, the sooner children are educated about financial matters and the better their understanding; the easier it will be for them to make responsible decisions later on in life. “If this education gap continues and many are forced to simply ‘pick up’ financial education as they go along, it is key that financial providers make their products and services as simple and straightforward as possible to ensure the next generation of savers aren’t left in the dark.” ENDS Notes to Editors 1. The survey of parents’ attitudes to financial education of children was carried out by TNS Phonebus among 520 GB adults aged 16+ who are parents of children in August 2005. 2. The National Savings and Investments survey among 1,010 adults was conducted by TNS via PhoneBus, 19-21 August 2005. 3. NS&I is one of the UK’s largest financial providers, with a customer base of 26 million people and a record £69 billion invested. It remains unique in that it provides retail savings and investments that are 100% secure, backed by HM Treasury. Its total balance of funds now represents 18% of the national debt and NS&I is a part of the mainstream financial services industry. For more information please go to www.nsandi.com 4. NS&I is a proud sponsor of pfeg (Personal Finance Education Group), an educational charity which is working with teachers in schools and colleges across the UK at a strategic level to promote the development of financial capability. For more information on pfeg go to www.pfeg.org Dax Harkins is available for interview and high-resolution photographs can be supplied. Contact the media team to arrange an interview or request photographs by e-mail.
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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