"Let's play a game,” says Rob Gardner, opening up his bag of tricks. A jumble of colourful building blocks spill out onto the table in front of me.
He tells me to make as many towers as I want, as high as I want.
“I can’t believe I’m being paid to do this,” I laugh as I set about to make the tallest tower possible in 30 seconds.
Believe it or not, this game – what Gardner has dubbed “Built to Last” – is designed to teach kids about risk-taking and compound interest. I soon clock that I should have built lots of smaller, more structurally sound towers in order to get the best, most reliable returns.
This game is one of several that Gardner, through his charity RedStart, is bringing to school children in order to educate them about personal finance.
“Parents would rather talk to their kids about sex than about money
Millions of people in the UK have less than £100 in savings, and the lack of financial literacy is terrifying – I wince to think that some of my 20-something peers don’t even know what a Help to Buy Isa is.
Improving our nation’s understanding of finance could go a long way to getting people get on the housing ladder, building pensions, and helping people live better lives. And with consumer debt spiralling in the UK – surely some financial education wouldn’t go amiss?
National initiatives like My Money Week certainly indicate the demand for lessons in finance.
But anyway, I digress. Let’s go back to Gardner, the straight-talking, no-nonsense co-founder of investment consultancy Redington. For someone who has spent his entire career in the financial services industry – an industry known for being, frankly, rather dreary – this chief executive bounces around the room with enthusiasm.
Redington is known for ensuring companies have enough money to pay for pension funds (queue painful memories of BHS), and RedStart stems from that.
“A few years ago, it became quite obvious to me that this final salary system was not sustainable, and that meant that people my age and younger would be invested in defined contribution schemes.
“It’s quite subtle, but essentially this means financial responsibility is shifting from your employer and the government to you as an individual. And what I realised then is financial capability in the UK is very low; most people have never had any kind of formal education around money, but it’s becoming more important for young people to understand it.”
Business is no longer about being a faceless corporate, and some big players are now taking philanthropy seriously. Just look at Ikea’s work with charities and Pret a Manger dishing out unsold sandwiches to homeless people.
Those companies are leading by example, and Gardner says he wanted Redington to give back in some way. Indeed, the aim of the charity is to teach one million young people how to budget, save, invest, and give back.
It’s not uncommon for people who have spent their entire working lives in finance to struggle to break things down into plain english for adults, not to mention children. But despite having the likes of Deutsche Bank and Merrill Lynch on his CV, Gardner seems to thrive off helping people as understand the nitty-gritty of finance.
“When you look at how to grow your money over time, a lot of it is pretty simple, so we should be questioning why the basics aren’t being taught to everyone,” he says.
The founder points out that while 45 per cent of schools teach the basics of finance to secondary school children, the rest don’t because the teachers’ own knowledge is hazy. Essentially there’s a negative cycle that needs to be broken.
But challenging the status quo isn’t easy. “Parents would rather talk to their kids about sex than about money,” Gardner says. “They are uncomfortable because they also have a lack of knowledge. After our sessions, the children will often know more about money than their parents.”
It was becoming a dad himself and reading Peppa Pig to his two young daughters that inspired Gardner to write Save your Acorns, a children’s book to help youngsters understand the basic principles of saving.
The government has been slow to get financial education on the national curriculum, but – as with all policy changes – research and extensive lobbying is necessary to make things happen.
And as teachers are already overwhelmed (and not always keen to take on yet more work), a lot of RedStart’s work is providing evidence that this is helpful to children, working with a set of schools to integrate financial education into the existing syllabus – weaving it into PHSE and maths. “The Department of Education is focused on STEM subjects, and so we’ve framed it by running a pilot project to see how financial education could improve maths scores.”
Eventually Gardner hopes the programme will be used by schools around the country.
Having grown up in Argentina in the 1980s, Gardner admits that his family didn’t have much money. “I used to collect Coca Cola bottles from the other kids and exchange them for coins. Back then, the country was undergoing huge inflation – prices would go up everyday in the supermarkets, so my family would try and keep hold of the money by changing everything into dollars. At seven, I understood that they were protecting their money against the ravages of inflation.”
Indeed, research from the Money Advice Service back in 2013 found that our saving habits are formed by the age of seven, which is why primary school children are included in RedStart’s remit.
With parents who taught in schools in Argentina, you can see how the art of teaching is rooted in Gardner’s character.
“Educating kids at a young age can create a more engaged society – lack of understanding means people just run away from it,” he says. “There are people in certain income bands who don’t even need to end up with money troubles, but because of a series of misunderstandings, it’s quite easy to fall off the track and end up in debt. The lack of education also means they miss out on this wealth creation.”
The chief executive reckons the wealth inequality gap exists because there are people who understand money (and can therefore take advantage of it) and people who don’t. And with millions of pounds lost to fraud every year, it’s also about being savvy.
In one of the RedStart games, the kids get a call from a dude named Rich Ricky who claims he can double their money. The aim, of course, is to teach them about scammers and risky deals. Most of the kids are conned out of cash in the game, but it means they’re less likely to lose money in real life.
And that’s the crux – we need to help young people learn about finances in the classroom, before they are forced to learn the hard way.