Last month we reported on the online contributions to the UCAS site, yougofurther.com, which seem to show that financial literacy training in schools had made little difference amongst the current crop of university students.

This year 6000 students are taking a Foundation or Intermediate Certificate in personal finance – GCSE, A or AS level equivalents – run by the charity IFS School of Finance (previously Institute of Financial Services). IFS and the British Bankers’ Association have both called for better financial education in schools to improve the nation’s financial capability. IFS even have research that shows one in five teenagers think a pension is a type of bank account!

In 2004, IFS signed a four-year agreement with Pearson VUE for computer-based test delivery of its IFS qualifications. IFS, which has over 80,000 students in 100 countries, has just appointed Martin Day from Henley Management College to the new post of Director of Higher Education and Executive Development.

Hopefully he can start getting some traction in improving the financial literacy of students, but we suspect this will be next to impossible when you consider the woeful level of financial literacy amongst many parents. Most people think they are pretty financially savvy, but it’s worthwhile taking the IFS’s RuMoneyWise test to see what you really know.

Ten years of low interest rates, a booming property market and a near absence of a real pensions policy, have all contributed to our woeful lack of financial literacy as a nation. If the UCAS social networking site is anything to go by, the softly-softly approach to improving financial literacy has been a waste of time and money. What will be more effective in changing young people’s attitude to financial literacy will be the blunt reality of their debts and the long-term impact on their lives that will come with financial ignorance.

But it’s not just a problem for students, parents who have benefited during the last decade may have their own steep learning curve if there is a significant change in economic circumstances (such as the recent jump in bond yields). The business lesson here? General financial education via the formal education system is a modest business opportunity, the real learning will occur experientially when people start remembering that economic cycles go down as well as up.

www.ifslearning.com
www.rumoneywise.com