Financial literacy teaches young people to have aspiration, says Barings boss
Financial literacy is crucial to teach young people to have aspiration about their future prospects, a senior leader at one of the world’s biggest investment firms has told City AM.
Martin Horne, Co-Head of Global Investments at alternative asset manager Barings, said young people are able to have a much better understanding of how to build their career if they are able to get to grips with essential financial concepts.
Fewer than one in five young people (19 per cent) are able to correctly answer the “Big Three” financial literacy questions relating to interest, inflation, and risk, according to a survey commissioned by the London Foundation for Banking and Finance.
Meanwhile, almost two-thirds (64 per cent) reported feeling anxious about money. Fewer than one in ten young people surveyed (9 per cent) identified school as their main source of financial understanding, while more than three in five (61 per cent) said they rely primarily on their parents for financial knowledge.
“Nearly two thirds of children are already getting anxious about their finances and their future world,” Horne said.
“Financial literacy teaches you to have aspiration, I believe, in terms of where you want your future state and what you want from your career and your future going forwards.
“All of these things are really important to embed confidence around jargonistic terms like interest and mortgages and loans and to have people really understand what they’re getting into and what the outcomes are likely to be.”
Barings has given its support to the Year Six literacy campaign, helping close the gaps in access to financial literacy among children by bringing practical financial learning directly into the classroom.
City AM launched the campaign in partnership with City Pay it Forward, an independent financial education charity which raises grant funding from City firms and individuals, enabling the delivery of free, high quality financial education to every Year Six child in the capital.
“We want to be really active in the communities in which we operate and it’s about bringing forward the youth and their potential within those communities,” Horne said.
“This offers everything we look for – not just a financial contribution from our firm but also our staff’s ability to get involved, be part of the education process, and use the abilities and knowledge that they have to pass it on to the next generation and leave a lasting legacy.”