To build a UK investing culture, we need to start in schools
The old adage, ‘look after the pennies and the pounds will look after themselves’ still rings true today. Yet, financial literacy is not just about learning how to balance a budget or save for a rainy day, it is about equipping young people with the skills and confidence to navigate life’s financial challenges and opportunities.
My own journey began in a primary school savings club, faced with the classic dilemma: spend 10p on sweets, or save it for something bigger. This simple choice was my first lesson in the value of saving. Indeed, research shows it is in these formative years that building financial literacy is most effective, particularly between the ages of five and seven, when lifelong habits begin to form.
Early intervention is therefore crucial. Not just in terms of building numeracy skills but helping children develop a practical understanding of how money works in the real world, so they can have confidence in making financial decisions as adults. This is a lifelong journey, in which financially resilient households and economies are built upon the foundations of good financial education.
When looking at investing in particular, which is the remit of the Investment Association, our recent research shows that when asked what would encourage more people to invest, the top response was “more financial education in schools.” This was chosen by 30% of respondents.
Education translates into real world outcomes. Those who recall receiving financial education in school are more likely to feel like investing is for them (45% vs. 28%) and to have conversations about investing with their friends (46% vs. 30%).
The government’s recent commitment to make financial education compulsory in primary schools in England is a vital step forward. But legislation alone is not enough. For financial education to have a lasting impact, it must be supported by high-quality resources, trained teachers and ongoing engagement with families and communities.
That’s why I’m proud to support The Year Six Dividend campaign, as well as The Just Finance Foundation, of which I’m Chair. We must also ensure that financial literacy is woven into the fabric of everyday learning, not treated as a one-off lesson.
Helping people to continue building their financial knowledge into adulthood is also important. The UK retail investment campaign – a nationwide, educational campaign announced by the Chancellor and funded by the financial services sector – will raise awareness of the importance of investing for people’s financial wellbeing. My first investment came during the Yorkshire Water privatisation, a financial decision which was made possible by the foundations laid in my earlier years.
If we want to build a resilient, prosperous future for the UK, we must invest in the financial literacy of our youngest citizens. The pounds will indeed look after themselves, but only if we teach every child how to look after their pennies.
Chris Cummings, Chief Executive of the Investment Association