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 David David 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 meet Keeping track of your finances Planning ahead Choosing financial products Staying informed

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Branded ItemPriceValue ItemPrice Cornflakes 500g£1.98Cornflakes0.31 Bold crystal rain£4.52Bio Liquid0.99 Pyramid Tea Bags£2.18Tea bags0.27 Long Grain Rice£3.88Long Grain Rice0.60 Uncle Ben Curry Sauce£1.59Curry Sauce0.09 Nescafe Gold Blend£2.99Coffee Powder0.49 Baked Beans£0.69Baked Beans0.31 Chopped Tomatoes£0.99Chopped Tomatoes0.28 Green Giant Sweetcorn£0.85Sweetcorn0.27 Heinz Tomato Ketchup£1.99Tomato Ketchup0.33 Golden Shred marmalade£1.17Marmalade0.20 Dolmio Bolognese Sauce£1.37Bolognese Sauce0.26 Colgate Toothpaste£0.90Toothpaste0.20 Napolina Tortigetoni£2.09Pasta Shapes0.17 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 National Curriculum 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 to 19-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 capability 83% said they would like more staff development on Fin Cap 85% 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 was Between 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 Others Teach Me Money for Life Challenge Embedding

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 3 learners relationship with money & their needs, wants and aspirations

Module 4 Methods for developing financial capability

Are they different? Does it matter?