#financialedforum Introduction #financialedforum Russell Winnard - - PowerPoint PPT Presentation

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Financial Education Forum

Hosted by Prudential plc

16 October 2017

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Introduction

Russell Winnard Head of Educator Facing Programmes & Services Young Enterprise

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Viewpoint

Michael Mercieca Chief Executive Young Enterprise

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The All Party Parliamentary Group on Financial Education for Young People

Julian Knight MP Chair

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5 Financial Education

Money Advice Service update

Financial Education lead, Money Advice Service Kirsty Bowman-Vaughan

6 Financial Education

Update on the Bill

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Single Financial Guidance Body

Four named functions in the Bill:

• pensions guidance
• debt advice – England only
• money guidance
• strategic function: support and co-ordinate a national strategy

to improve:

▪ Financial capability ▪ Ability of the public to manage debt ▪ Provision of financial education to children and young people

…. by working with others in the financial services industry, the devolved authorities and the public and voluntary sectors.

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How did we get here?

Public Financial Guidance Consultation Oct. 2015 Public Financial Guidance Review (PFGR): consultation March 2016 Budget 2016 – MAS, TPAS and Pension Wise restructure announced PFGR: consultation on a single body - Dec 2016 General Election – 8 June 2017 Financial Guidance & Claims Bill – 22 June 2017 Lords Committee stage complete – October 2017

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Where to from here?

Report writing – 24, 31 October Royal Assent spring 2018 (tbc) (subject to Parliament) SFGB Go Live – no earlier than October 2018 Third Reading in the Lords – early Nov Moves into the Commons - November

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▪ The difference between guidance and advice ▪ Financial inclusion vs financial capability ▪ Debt advice and the devolved nations ▪ Financial education on the primary school curriculum

Key points of debate

FinCap Week 13-19 November 2017

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This year we want to get more people talking about money

FinCap Week is an annual event which takes place in mid-November. It celebrates, showcases and amplifies the work underway to improve financial capability and ultimately to improve financial wellbeing. The week is organised as part of the Financial Capability Strategy for the UK and aims to get more people talking about money. #talkmoney FinCap Week is for anyone working to help people improve their financial wellbeing – everyone is invited to join the movement it’s up to you to decide exactly how.

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Take a look at the participation pack for ideas and show your support on the map

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▪ Get t more peo eople e in in you

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lking abou

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• ney

▪ Be Be part rt of

• f th

the e #talkmoney con

• nversation

▪ Start talk lking mon

• ney in

in you

• ur workplace

▪ Co Commit it to

• im

improve you

• ur fin

fincap wor

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fincap.org.uk/fincapweek

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7 Nov Young Enterprise, Centres for Excellence Conference, London – FinCap Week 13 Nov Launch, social media ‘Thunderclap’ All week Citizens Advice ‘Talk Money’ Workshops, UK wide 13/14 Nov Workshop and FinCap Award at Citizens Advice Annual Conference, Manchester 14 Nov CYP Conference, Welsh Govt & MAS, Cardiff 14 Nov Open University, Puffin True Potential Conference, London 14 Nov MyBnk ‘Money House’ Parliamentary Launch Event, London 15 Nov Toynbee Hall/CHASM, Savings Summit, Birmingham 15 Nov Scottish Parliamentary Event, Edinburgh 15 Nov TechCity Fintech Award Ceremony, London 16 Nov MAS MAS Fi FinC nCap Co Conference, Lond London 16 Nov Welsh Sennedd Event, Cardiff 16 Nov Financial Health Fellowship 2017 Demo Day, London

What is already happening

15 Financial Education

Financial education update

16 Financial Education

Schools Communities Families

17 Financial Education

Schools Communities Families Schools survey

18 Financial Education

Schools Communities Families Schools survey Deep dives

19 Financial Education

Schools Communities Families Schools survey Deep dives Local authorities

20 Financial Education

Schools Communities Families Schools survey Deep dives Local authorities Commissioning plan

21 Financial Education

Schools Schools survey

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Project Aims

We hope to understand: ▪ the percentage of state secondary schools and colleges in England currently delivering some form of financial education; ▪ how schools/colleges are delivering financial education ▪ which types of school or college are more or less likely to be delivering financial education ▪ the main barriers to delivering financial education in schools/colleges where it is not currently being delivered. This will help us understand the current landscape and how we can help schools in their delivery of fin ed or where there are gaps we can fill in

• ther ways.

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Families Deep dives

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Project Aims

We aim to: ▪ Understand better the factors affecting financial capability amongst children and young people today ▪ Establish where parents may be particularly most influential ▪ Identify whether there is a particular window of opportunity ▪ Identify areas parental interventions could focus on

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Background

▪ Across all ages, there are 45 indicators of financial capability contained in the FinCap survey. ▪ Indicators grouped into different components of Financial Capability related to the child’s preparedness for financial independence ▪ Level of Ability (e.g. ‘choosing the correct coins when paying’) ▪ Mindset regarding money (e.g. ‘compares prices’) ▪ Level of financial Connection (e.g. ‘knows the type of bank account’) ▪ Positive financial Behaviour (e.g.‘keeps track of spending’)

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▪ Parent’s own financial capability ▪ Financial responsibility given to child by parents in household ▪ Parent’s role modelling: discussions and demonstrations with money ▪ Parent’s perceptions of more general parental attitudes towards teaching children about money, including what ages they think are appropriate for learning

Parental categories

28 Type of financial capability composite measure Spending autonomy given Saving autonomy given Talks about household income Talks about spending Talks about debt and borrowing Shows how to set budget Shows how to check bank balance Shows how to pay bills Confident talking about money Can be good role model General attitude involvement Talk about bills by age 7 Give money by age 7 Talk about debt by age 7 Money habits formed by age 7 Give freedom with money by age 7 Expose to how money works Not anxious about financial situation Can change financial situation Grandparents talked about money Parents save regularly Sets rules about money Confident managing money Parent can pay unexpected bill Ability Mindset Connection Behaviour Respons- ibility Parent's financial capability Role modelling Parental attitudes

Parental attitudes and behaviour are most strongly related to a child’s financial Mindset, followed by Behaviour and Connection next, and then Ability

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The areas where parental attitudes and behaviours have the strongest relationship with child financial capability are when parent: ▪ Gives spending responsibility ▪ Gives savings responsibility ▪ Talks about money with child (and is confident in doing so) ▪ Shows how to manage money ▪ Generally support children being involved with money with the belief that pocket money by the age of 7 coming out as a particularly important type of involvement ▪ Can explain how money works ▪ Is confident managing money

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Next steps

▪ Form part of Needs Analysis will be publishing in Spring 2018 ▪ Further analysis conducted of vulnerability variables ▪ Analysis of the Financial Capability Components: what are the most important aspects of financial capability and how can we use them to identify the key drivers of childhood financial behaviour?

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Communities Local authorities

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We hope to further: 1. Understand the financial capability needs of VCYP and what works 2. Build relationships with potential commissioning, delivery, and policy influencing partners 3. Test ways to embed financial capability into existing local support for VCYP and build the business case 4. Identify resource need and barriers for scaled up support … in order to inform: ▪ decisions about commissioning ▪ advice on effective delivery ▪ activities and networks to help coordination ▪ policy recommendations

Project Aims

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What we have offered

• Making the case & providing evidence
• Identifying and adding to strategies and plans
• Including financial capability in commissioning plans and specs
• Embedding financial capability in processes, assessments, plans
• Identify gaps in delivery and help scope projects to fill gaps
• Advise on and support evaluation of existing projects (inc. OFs)
• Making connections to other agencies, e.g. IMLT, Young

Enterprise practitioner training, Youth Homelessness Advisers

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Priority Proposals: immediate work in LAs

Offer Focus Essex

1) Safe in Essex – financial capability in commissioned support for teens showing risky behaviours 2) 0-19 contract – design & evaluation for support for teenage parents ▪ Commissioning ▪ Service Design

Croydon

3) Children in Care Council 4) Locality networks & VCSF forum – awareness raising and addressing barriers ▪ Service Design ▪ Workforce Development

Nottingham

5) Priority Families seminar - – awareness raising and addressing barriers 6) Testing out embedding financial capability in assessments, risk tool, measuring success ▪ Commissioning ▪ Workforce Development ▪ Evaluation

Blackpool

7) Embedding financial capability in young people at risk assessment and referral processes 8) Building financial capability into support package for care leavers ▪ Joining up of Delivery ▪ Service Design

Doncaster

9) Social enterprise providing loans to care leavers – development & evaluation 10) Financial capability in commissioning – young carers & floating transition support specifications ▪ Commissioning ▪ Service Design

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Next steps

▪ Run pilot October – March 2018 ▪ Prioritise further support and assess resource need ▪ Test support in devolved nations, identify unique needs ▪ Test further scaled up standardised offer in 2018 in England

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Commissioning plan

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Project Aims

▪ Develop a robust, evidence based proposal to the SFGB on what Commissioned services for children and young people should look like ▪ Support other funders to make the most informed commissioning decisions

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Elements of the plan

Spring 2018 ▪ Needs analysis: what are the most important aspects of financial capability, which groups are most in need, and in what ways? ▪ Market analysis: what does the existing funding, commissioning and provider market look like. What barriers exist? ▪ External drivers: How are things are changing in the wider environment that might affect children and young people’s needs in coming years

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Elements of the plan

Spring 2018 ▪ Needs analysis: what are the most important aspects of financial capability, which groups are most in need, and in what ways? ▪ Market analysis: what does the existing funding, commissioning and provider market look like. What barriers exist? ▪ External drivers: How are things are changing in the wider environment that might affect children and young people’s needs in coming years Summer 2018 ▪ Evidence and methods analysis: How effective is existing provision? ▪ Gap analysis and commissioning priorities: How well does existing provision meet need? What gaps should be prioritised?

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Elements of the plan

Spring 2018 ▪ Needs analysis: what are the most important aspects of financial capability, which groups are most in need, and in what ways? ▪ Market analysis: what does the existing funding, commissioning and provider market look like. What barriers exist? ▪ External drivers: How are things are changing in the wider environment that might affect children and young people’s needs in coming years Summer 2018 ▪ Evidence and methods analysis: How effective is existing provision? ▪ Gap analysis and commissioning priorities: How well does existing provision meet need? What gaps should be prioritised? Autumn 2018 ▪ Commissioning plan: Summarises above work and sets out an action plan

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Elements of the plan

Spring 2018 ▪ Needs analysis: what are the most important aspects of financial capability, which groups are most in need, and in what ways? ▪ Market analysis: what does the existing funding, commissioning and provider market look like. What barriers exist? ▪ External drivers: How are things are changing in the wider environment that might affect children and young people’s needs in coming years Summer 2018 ▪ Evidence and methods analysis: How effective is existing provision? ▪ Gap analysis and commissioning priorities: How well does existing provision meet need? What gaps should be prioritised? Autumn 2018 ▪ Commissioning plan: Summarises above work and sets out an action plan

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Thank you

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Student’s financial literacy: the results of the latest OECD financial literacy option

Dr Adele Atkinson Senior Policy Analyst OECD

Financial literacy in PISA

• In 2015, over half a million students…

representing 28 million 15-year-olds in 72 countries/economies

• … took an internationally agreed 2-hour test in science,

mathematics, reading, collaborative problem-solving and financial literacy …

Goes beyond testing whether students can reproduce what they were taught… … to assess students’ capacity to extrapolate from what they know and creatively apply their knowledge in novel situations

• In 2015, around 48 000 students were assessed in financial

literacy

representing about 12 million 15-year-olds in the schools of the 15 participating countries and economies

Content

Money and transactions Planning and managing finances Risk and reward Financial landscape

Processes

Identifying financial information Analyse information in a financial context Evaluate financial issues Apply financial knowledge and understanding

Contexts

Education and work Home and family Individual Societal

Financial literacy content, context and processes

Mean performance in financial literacy among 15-year old students

B-S-J-G (China) Belgium (Flemish) Canadian provinces Russia Netherlands Australia United States Poland Italy Spain Lithuania Slovak Republic Chile Peru Brazil

380 400 420 440 460 480 500 520 540 560 580 Mean score Source: OECD PISA 2015 Volume IV Students ‘Financial Literacy

13 22 22 13 19 20 20 20 22 22 25 32 35 38 48 53 33 11 24 22 17 15 6 8 10 12 6 4 6 3 1 3

80 60 40 20 20 40 60 80 100 B-S-J-G (China) Russia Belgium (Flemish) Canadian provinces Netherlands Australia Italy Poland United States OECD average-10 Spain Lithuania Slovak Republic Chile Peru Brazil

Below Level 2, at best students can do things such as:

• identify common financial products and terms

and interpret information relating to basic financial concepts.

• recognise the difference between needs and

wants and can make simple decisions on everyday spending.

• recognise the purpose of everyday financial

documents such as an invoice and

• apply single and basic numerical operations

(addition, subtraction or multiplication) in financial contexts that they are likely to have experienced personally.

Significant variation within each country/economy

%

Source: OECD PISA 2015 Volume IV Students ‘Financial Literacy

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Russia 45 Brazil 47 Slovak Republic 48 Italy 52 Canadian provinces 53 Lithuania 58 Spain 58 OECD average-10 62 Poland 62 Chile 62 Peru 68 B-S-J-G (China) 69 United States 70 Belgium (Flemish) 70 Netherlands 71 Australia 71

Variation uniquely associated with mathematics performance Variation uniquely associated with reading performance Variation associated with more than one domain Variation uniquely captured by the financial literacy assessment

Total explained variation

Performance in financial literacy is correlated with performance in mathematics and reading, but around 38% of the score reflects factors that are uniquely captured by FL

On average, students who hold a bank account perform better in financial literacy than students of similar socio- economic status who do not have a bank account

• 20

20 40 60 80 100

Slovak Republic Russia Lithuania Poland B-S-J-G (China) Chile United States OECD average-10 Italy Belgium (Flemish) Australia Spain Canadian provinces Netherlands

Score-point difference

After accounting for socio-economic status Before accounting for socio-economic status

Difference between students who have a bank account and students who do not

Source: OECD PISA 2015 Volume IV Students ‘Financial Literacy

• 30
• 25
• 20
• 15
• 10
• 5

5 10 15

Lithuania Slovak Republic Poland Australia Spain Brazil OECD average-10 Netherlands Canadian provinces Peru Russia Belgium (Flemish) United States Chile B-S-J-G (China) Italy

Before accounting for performance in other subjects After accounting for performance in mathematics and reading

In most countries/economies there are no differences in financial literacy between boys and girls at the mean…

Score-point difference Girls perform better in countries below the line Boys perform better in countries above the line

Difference between boys and girls Source: OECD PISA 2015 Volume IV Students ‘Financial Literacy

10 20 30 40 50 60

Peru Brazil Lithuania Chile Slovak Republic Spain Italy Poland Russia United States OECD average-10 Australia Netherlands Canadian provinces Belgium (Flemish) B-S-J-G (China)

Boys Girls

… but in 9 countries and economies out of 15, more boys than girls are low performers

10 20 30 40 50 60 Boys Girls Students below Level 2 Students at Level 5 % %

Source: OECD PISA 2015 Volume IV Students ‘Financial Literacy

300 350 400 450 500 550 600 650

Peru 117 Brazil 78 Chile 103 Slovak Republic 80 Lithuania 71 Spain 79 United States 97 OECD average-10 89 Italy 60 Poland 73 Australia 107 Netherlands 104 Belgium (Flemish) 110 Russia 46 Canadian provinces 77 B-S-J-G (China) 132

Score points

Top quarter of ESCS Third quarter of ESCS Second quarter of ESCS Bottom quarter of ESCS Difference between students in the top quarter and students in the bottom quarter

• f this index

Socio-economically advantaged students score 89 points higher than disadvantaged students, on average across OECD, equivalent to more than one PISA proficiency level

Mean score, by quarters of the PISA index of economic, social and cultural status (ESCS)

440 450 460 470 480 490 500 510

Never or hardly ever Once or twice a month Once or twice a week Almost every day

Score points

Parents play a role in developing their children’s financial literacy not only through the resources that they make available to them but also through direct engagement (OECD average)

Mean score, by students’ answers to the question: “How often do you discuss money matters (e.g. talk about spending, saving, banking, investment) with your parents?” Discussing money matters with parents at least sometimes is associated with higher financial literacy than never discussing the subject, after accounting for students’ socio-economic status But discussing very often may mean something else….

More students receive money as a gift than through work There is a +ve correlation between income from different types of work: in other words, those who do things like babysitting are also the ones earning money for doing chores; and boys are more likely than girls to be involved in regular work activities Getting an allowance is negatively correlated with work; and girls are more likely than boys to receive money without working in some countries

Students’ sources of income

10 20 30 40 50 60 70 80 90

Italy Spain United States Canadian provinces Chile Australia OECD average-10 Slovak Republic Russia Lithuania Poland B-S-J-G (China) Netherlands Belgium (Flemish)

%

Working outside school hours (e.g. a holiday job, part-time work) Working in a family business Occasional informal jobs (e.g. baby-sitting or gardening) Any work activity (working outside school hours and/or working in a family business and/or occasional informal jobs)

Some 64% of students earn money from some formal or informal work activity on average across OECD

Percentage of students who receive money from:

Before and after controlling for student characteristics, financial literacy is lower among students who earn money, than those who don’t. In contrast, on average, students who receive money as a gift perform better by 13 score points, on average, than students who do not Similar results are found for maths and reading Analysis controls for: gender, socio- economic status of family; immigrant background; school location; holding a payment product; receiving money from other sources; discussing money with parents; total time in lessons; total time doing homework and after school study

Earning money from chores or work is associated with lower performance in financial literacy

Financial literacy skills for all students Address the needs of low- performing students Tackle socio- economic inequalities early

• n

Provide relevant

• pportunities for

learning to boys and girls Help students make the most of available learning

• pportunities at

school Target parents at the same time as young people Provide young people with safe

• pportunities to

learn by experience

• utside of school,

and harness teachable moments such as work experience Evaluate the impact of initiatives in and

• utside of school

Research the reasons behind the PISA findings

A multifaceted policy agenda is required

www.oecd.org/finance/financial-education SecretariatINFE@oecd.org

Thank you

Find out more about our work at www.oecd.org/pisa All publications and the complete micro-level database

Prudential and financial inclusion Earn, save, spend and donate

Jonathan Oliver Group Communications Director, Prudential plc

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Since 1848 Prudential has been committed to improving the popular understanding of finance

The ‘penny policy’ made savings and protection accessible for working class families

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Prudential has grown to become Asia’s Number 1 life insurer

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In Asia, research showed financial literacy was a significant concern

• 13% of Asian parents considered their

children’s money management skills ‘very good’

• 95% of parents said it was important

for children to learn about managing money

In 2011 Cha-Ching was born

Cha-Ching has reached millions of Asian households

• Cartoon Network broadcasts reach 34 million

households daily in 8 markets

• Over 77 million website page views
• Over 180,000 game and app downloads
• School contact programme reaches more

than 300,000 children

• Curriculum used by more than 1,000 schools
• Endorsed by education ministers of

Indonesia, the Philippines and Malaysia

• Arnel Pineda of Journey featured in

episode to raise money for typhoon relief

• Only 41% of 16 to 17 year-olds are able to correctly read a pay

slip and 18% are unable to correctly identify how much was in a bank account when looking at a bank statement (The Money Advice

Service)

• 66% of teachers believe that financial education should start in

primary school (APPG Report)

• 69% believe schools need a lead teacher for financial education

(APPG Report)

• Only 40% of young people aged 7 to 17 being taught basic

money management (The Money Advice Service, November 2016)

The UK faces a similar financial literacy gap

• We road tested the resource with children and

parents – both quantitative and qualitative

• 77% of children feel they would like to watch the

Cha-Ching film to help them learn about money

• Videos needed local accents and local currency
• Messages landed well with the children

Success in Asia prompted us to examine if Cha-Ching could be relevant here in the UK

‘Don’t spend all your money in one day, think about saving some and then you won’t run out.’ 4-5 year old girls ‘It’s about charity. It’s really good to give your money to charity once you’ve saved it up.’ 7-8 year old girls ‘You need a job, to get money, to pay bills and buy food, so you can live.’ 10-11 year old boys

Cha-Ching in the UK

• Digital educational resource for

primary school teachers – focus on Key Stage 2

• Used by over 600 primary schools

across the UK

• Extremely positive feedback from

teachers, including recommendations for using with SEN students

• 17,000 individual downloads in 649 schools

across the UK since 2016 UK launch

• Family Zone with activities to use at home

• Build awareness with parents,

government and public bodies

• Roll out to more primary schools

across the UK

• Continue to improve children’s

understanding of money

What next?

Questions and feedback

Tackling financial exclusion – a country that works for everyone

Karen Rowlingson, Professor of Social Policy University of Birmingham

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Panel

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Close

Thank you for attending. We look forward to seeing you at the next Forum meeting in March – details to follow.