From 2011 lessons in financial management will be compulsory for all schoolchildren.
Ed Balls, secretary of state for children, schools and families, says these lessons will form part of schools’ personal, social and health education programmes.
The plan includes an introduction to money and saving for five year olds, moving on to credit cards, mortgages, loans and debt as children get older.
On the face of it this is a good thing. We know that financial understanding among consumers is low and many don’t know how to contact a financial adviser, preferring to buy mortgages direct and take out no protection at all.
Of course, knowledge won’t overcome inertia and apathy. These are big stumbling blocks on the road to financial planning and lessons in finance may not overcome them.
But if we agree that knowledge is the first step on the road to a secure financial future then financial lessons could help the advice industry make an early connection with future consumers.
At secondary school level when pupils are learning about financial products, input from advisers could be valuable. A local adviser could offer to speak to students and pupils who have had the chance to meet an adviser would at least be aware of the service they offer.
For financial education to be effective it must be relevant to consumers at their stage in life. As an industry we must take apathy and inertia into account and tailor our communication based on the level of consumers’ understanding.