Financial Capability

WHY?

Theme four of the WG Financial inclusion strategy sets out the WG vision for Financial Capability in Wales as: ‘A Wales where people are actively involved in financial education from childhood to later life, where they are constantly acquiring new knowledge and skills that will help them to better manage their finances and make more informed financial decisions.’

POLICY

‘Through up skilling the sector we want to create a generation of learners better able to manage their money, reduce their debt and access or remain in further education.’

Welsh Government

Quick Statistics

• The average household with debts owes £16, 336 (exc. mortgage)

• 9,389 new debt problems dealt with by the CAB every day

• Every 15 minutes a property is repossessed

• Every 3.87 minutes someone is declared insolvent or bankrupt

How does poor financial literacy affect lives?

Statistics

Breaking up over money worries

Our learners are living in a rapidly changing financial world

Meet DavidDavid needed to borrow £180 until he next got paid. He applied online and got his money in an hour. David repaid this loan when he got paid 28 days later at a total cost of £225. Representative APR 1737% (variable*)

Representative APR

4214%

Payday loans 'cheaper than overdraft charges'

There’s always more to learn...

Young People and Money More food for thought …

• Many young people today have very little understanding of the costs of living independently and/or managing their money effectively

• A recent newspaper article referred to ‘over half of the UK's teenagers falling into debt by the time they are 17’

• 68% of students surveyed couldn’t correctly identify the cheapest loan

• Recent research has shown a link between money problems and mental health issues

• Young people with money worries and/or debt issues tend to have difficulty focussing on their studies or paid employment, underperforming as a consequence and finding themselves at a disadvantage.

Impact of poor financial capability (Direct & Indirect)

• Amount of part-time employment

• Attendance

• Academic performance• Participation in

trips/visits/work placements

• Progression• Retention

• Employability

• Accommodation

• Participation in extra-curricular/ personal development activities

• Participation in Students’ Union

• Social life• Physical Wellbeing• Mental Wellbeing

How does improved financial capability impact on well-being?

Psychological Wellbeing: 5.6%

Life Satisfaction : 2.4%

Anxiety/ Depression : 15%

Moving from LOW to AVERAGE levels of financial

capability

A £1000 increase in annual income leads to only a 0.2% improvement in life satisfaction

Financial Capability

Making ends meetKeeping track of your finances

Planning aheadChoosing financial products

Staying informed

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Bold crystal rain £4.52 Bio Liquid 0.99

Pyramid Tea Bags £2.18 Tea bags 0.27

Long Grain Rice £3.88 Long Grain Rice 0.60

Uncle Ben Curry Sauce £1.59 Curry Sauce 0.09

Nescafe Gold Blend £2.99 Coffee Powder 0.49

Baked Beans £0.69 Baked Beans 0.31

Chopped Tomatoes £0.99 Chopped Tomatoes 0.28

Green Giant Sweetcorn £0.85 Sweetcorn 0.27

Heinz Tomato Ketchup £1.99 Tomato Ketchup 0.33

Golden Shred marmalade £1.17 Marmalade 0.20

Dolmio Bolognese Sauce £1.37 Bolognese Sauce 0.26

Colgate Toothpaste £0.90 Toothpaste 0.20

Napolina Tortigetoni £2.09 Pasta Shapes 0.17

TOTAL £27.19 £4.77

Financial education is seen as having relevance across the curriculum and across all key stages. It also has wider benefits and many practitioners consider it to be integral to good health and well-being, preparation for the world of work and enabling pupils to become active and socially aware citizens. Inspection framework

Estyn’s guidance for inspection recognises the need to consider how well pupils are prepared for life and work outside school. With this in mind, financial education provision should be a more prominent issue for consideration as part of the inspection process. The Welsh Government should discuss this issue further with Estyn.

Financial capability - its place in the curriculum

Financial education and using money are highlighted in the revised NationalCurriculum Orders (2008) and reference is made to them in:

• the mathematics NC Subject Order for seven to 16-year-olds;

• GCSE mathematics;

• the non-statutory skills framework for three to 19-year-olds;

• the non-statutory Personal and Social Education framework for seven to 19-yearolds;

And

• the non-statutory Careers and the World of Work framework for 11 to19-year-olds.

The WBQ Curriculum

Financial Capability - A theme linking several aspects of the WBQ

Financial Capability - A context for all 5 elements of the PSE component

Financial Capability - A context for key skills development

RESEARCH FINDINGS – STAFF

At one FE college, research carried out amongst staff indicated ‘that there is a considerable reluctance to engage with the topic [Financial Capability] because of a lack of confidence’.

In a staff focus group at another participating FE college: 75% said they would like an explanation of what is meant by financial capability83% said they would like more staff development on Fin Cap85% said they would like practical suggestions for classes 85% requested resources and recommended websites.Only 29% of staff questioned felt confident or very confident to deliver aspects of financial capability Across all the organisations involved with the project there was evidence that organisations and their staff do not always have the confidence and skills to support their learners in financial capability.  

REASEARCH FINDINGS – LEARNERS

18% of learners had money worries 13% of learners did not know what their financial position wasBetween 20% and 40% of learners were ‘not well in control’

Tutors also reported that learners ‘didn’t understand the long term impact of poor financial management’ ‘The group had no idea what APR stood for and were unaware how interest was applied to any type of loan.’FE college tutor ‘Over 50 percent of students from the money for life workshop said they would choose a higher interest rate rather than a lower interest rate over the same period for borrowing money. This would cost them more money.’FE college tutor

2011/20012

Four strands

Teach OthersTeach Me

Money for Life ChallengeEmbedding

Teach Others

Teach Me

Embedding

• Tool kit – NGFL Cymru• Teaching essential skills short course –

numeracy through financial contexts (Deeside College)

• The MoneyforLife Challenge – skills across the curriculum

• Mobile phone app

From this

To this

Lets do it and get our learners …

Embedding

• Tool kit – NGFL Cymru• Teaching essential skills short course –

numeracy through financial contexts (Deeside College)

• The MoneyforLife Challenge – skills across the curriculum

• Mobile phone app

Embedding

• Tool kit – NGFL Cymru• Teaching essential skills short course –

numeracy through financial contexts (Deeside College)

• The MoneyforLife Challenge – skills across the curriculum

• Mobile phone app

Procedural barriers to access The lobbying group Debt on our Doorsteps estimated that in 2011 as many as 7m people - or 165,000 households in the UK – were forced to use illegal money lenders because they couldn't find credit elsewhere.

Source: thisismoney.co.uk (2009)

In a perfectly logical world …

In the real world …

Module1

An environment that is conducive to learning

Module 2 How to assess financial skills, knowledge and

understanding

Module 3learners relationship with money & their

needs, wants and aspirations

Module 4

Methods for developing financial capability

Module 5

Resources that can support the development of financial capability

Module 5

Resources that can support the development of financial capability

Are they different?

Does it matter?