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RACHEL RICKARD STRAUS: Teach children about money to tackle inequality

RACHEL RICKARD STRAUSS: If we gave all children money lessons at school it could make us all wealthier – without the state handing out a single penny

I will never forget the thrilling anticipation of awaiting my first pay cheque, when I had a holiday job as a waitress.

As I cleared tables and scraped food scraps into the bin, I’d daydream about what I’d spend that first wage packet on.

By the time I received it I’d spent it several times over in my imagination. But, ripping open the small brown pay envelope, I was in for a rude awakening.

‘National Insurance?!’ I thought in utter disbelief, as I read my pay slip. ‘What on earth is that?’

I knew some of my earnings would go on tax. But I was not expecting another wodge to vanish with NI contributions. I’d have to wait for next payday to buy the CD by the band Ocean Colour Scene that I’d set my heart on.

Counting the costs: Improving personal finance education is cheap and pays huge personal and social dividends

Since then, I’ve discovered that most of us have experienced a shock money lesson at some point. For some, it’s discovering how easy it is to fall into debt when your bank hands you your first credit card. 

For others, it’s learning how many extra costs there are when renting or buying your first home.

Millions of workers who are set to become higher-rate taxpayers for the first time thanks to frozen tax bands are also in for a shock over the next few years.

But, most of us come to the same conclusion: why do we have to learn these lessons the hard way?

Last week, I chatted with Leon Ward, the new chief executive of personal finance education charity MyBnk. It goes into schools and teaches young people about bills, saving, budgeting — and, yes, what to expect on a wage slip.

Leon said that when he tells people about his job, the first thing they say is: ‘Oh, I wish I’d had money lessons at school.’

He believes — and I agree — that all young people should be taught about money throughout their school years.

But millions aren’t — almost two thirds of young people do not recall receiving any financial education.

The benefits go far deeper than preventing us from having to learn by making our own mistakes. Offering money lessons in schools is one of the simplest — and cheapest — ways of tackling inequality.

New research from MyBnk published this week suggests that people who received some financial education in school are better able to cope with the rising cost of living and are more resilient if they suffer a sudden drop in income. They are less likely to take out debt with eye-watering interest rates.

It is not fair that some people have the tools to manage their money while others don’t.

It’s especially unfair because young people from higher-income households are more likely to have good money skills than those from poorer households, according to the research.

Most strategies for tackling inequality in the UK are expensive. The Government’s Levelling Up fund totals more than £11 billion.

By comparison, improving finance education is cheap and pays huge personal and social dividends.

MyBnk calculates that for every £1 spent on money lessons for vulnerable young people on one of its programmes, it saves £5.57 in public spending on that young person in the future.

That’s because giving someone the skills to manage their money helps them to stay out of rent arrears, or prevents them from falling into debt that means they may need to claim benefits or other support from the state. 

Money lessons help to make people wealthier without handing them a single penny. Surely that’s a no-brainer.

Schools have a part to play, but we can all help by talking about money with friends and family and sharing our own experiences and money lessons we’ve learned the hard way.

MyBnk also believes we should champion our best money teachers and celebrate when schools get it right.

Luckily, that has already begun. The hunt for the best money teachers in Britain started this week. Investment platform Interactive Investor is offering a prize pot of £25,000 to be shared out to winning schools in the Personal Finance Teacher of the Year awards.

If you know a teacher who deserves to be recognised, send an email to to nominate them.

What’s one money lesson you wish you’d learned at school? I’d love to hear.