My 17-year old daughter has just opened her first bank account with HSBC to have her wages paid into from her part-time job at the local pub.
Tim Wheeldon is chief operating officer at Fluent Money
My 17-year old daughter has just opened her first bank account with HSBC to have her wages paid into from her part-time job at the local pub.
She surprised me by asking about setting up a savings account as well – I assumed most girls her age would be spending their meagre earnings on cheap gin or ornate nail extensions, but she announced that she intends to save a percentage of her earnings towards her future costs at university.
However, she didn’t understand what an ISA is, nor an AER and was clueless about how interest works. Now I don’t expect a 17-year old to be fully financially fluent, but a basic understanding of this should surely form part of the National Curriculum? Apparently not.
I had the good fortune to be able to send her to one a top private school in the North West and she now attends a great local grammar school for her A-levels.
I had assumed that the eye-wateringly large fees might include some form of education or preparation for life beyond school, but this appears to have not been the case. She can decline a Latin verb without blinking and could debate the finer points of rhetoric with Boris, but can’t tell me what an APR is, nor how credit scores work.
Incidentally, she had no idea how car insurance works or what a mortgage is. It turns out that she’s not alone; a quick social media poll revealed that most of her contemporaries were inadequately informed about matters financial too.
This made me think. Schools these days are focussed on league tables and protecting little Tristram’s gender-fluid issues, whilst dodging lawsuits from rabid parents: suing because their angelic offspring was upset at being told to stop drawing willies in indelible ink on the school hamster.
They concentrate on turning out exam scores rather than well-rounded students. The government’s curriculum is pivotal – since that is what the school will be judged on - social enrichment and preparation for life don’t even feature.
And that’s a shame because I can’t remember the capital of Bolivia (I just Googled it and was surprised to learn that it’s not La Paz, as I had thought - it’s Sucre) or the Euclidean proof for the infinity of Prime numbers, and that’s what I spent my schooldays learning about. Sure, I can remember how to say “the chicken is dead” in German, but that simply doesn’t cut the mustard in the wider world of employment.
For my first real job, I was employed by Barclays, and so picked up my basic financial grounding from them. I had no idea what council tax was, though, and had to figure out what it did and how to pay for it when I bought my first house at age 21.
Sure, I learned how to boil an egg from my compulsory Home Economics lessons, but in 2014, Ofqual announced that GCSEs in dozen’s of “soft” and “non-academic” subjects would be scrapped as they lacked “academic rigour”, and so Home Ec. was assigned to the wastepaper bin of British education, along with Human Biology and Environmental Studies.
So, the Government believes that the ability to distinguish between igneous and metamorphic rocks ranks higher than learning how to make beans on toast, what good nutrition looks like, or what impact your Ikea wardrobe has on the deforestation of Borneo?
I’m not surprised, nor am I a luddite – a world where your iPhone can act as a spirit level and you can Google the answers in a pub quiz means that information is available immediately and knowledge is a couple of clicks away. And let’s be honest, those of us who did do Home Ec can remember uninspiring lessons where your sponge cake looked more like the victim of a petrol-bombing than the one your parents bought from Sainsburys.
But whilst you save yourself the hassle of baking and nip down to Aldi these days and get a moist angel cake for 85p, you’re unlikely to get advice on your mortgage from Google.
And there’s the thing. The government says you need to take three exams to be able to give basic mortgage advice to a potential borrower. But the FCA’s rules on Execution Only allow you to take out a mortgage – your biggest financial transaction - without having had any education on the subject whatsoever. None.
Now, mortgage advice is not the same as Rocket Science, but it’s a bit more complex than knowing what “Der Hahn ist tot” means.
