Positive financial habits are essential to living independently. For young people in the most vulnerable circumstances this can be as simple as knowing how to budget for a weekly shop and as crucial as making the rent to avoid eviction.
Young people in or leaving the care system in the UK are particularly exposed to the consequences of being unable to manage their money, falling prey to scams, suffering financial exclusion and acutely feeling the brunt of poor financial decisions.
Growing up, people in care, of school age, will face the same issues as every child. Unfortunately, schools do not consistently offer a meaningful financial education to all students. However, schools do provide a place to access education for all.
From ages 16-18 financial management is a core part of a care leavers ‘pathway plan’, yet many young adults often only receive financial advice once a situation has reached crisis point. Many often do not appreciate the relevance and utility of financial education to them. They ‘do not know what they do not know’ so they need to be encouraged and incited to engage.
Legal duty – Investing in young people
Last year, the Children and Social Care Act placed a legal duty on local authorities to protect young care leaver’s economic wellbeing and ensure access to financial information. In 2016 The Children’s Society found that almost half of councils in England fail to offer these services.
ERS’ findings strengthen the case for providing trained expert money guidance for vulnerable young people, which is backed by reports from the All Party Parliamentary Groups on Financial Education for Young People, and on Ending Homelessness, and the Mayor of London.
The National Audit Office found problem debt is costing UK taxpayers £248m and wider society £900m per year. 18-24 year olds have average unsecured debts of £1,460 and are the UK’s fastest growing group of debtors, according to the Financial Conduct Authority. They are also the most susceptible in society to fraud and scams, says the Policy Network.
APPG on Financial Education for Young People
Beyond delivering financial education programmes to thousands of young people via Leaving Care Teams and sheltered housing units across the UK, MyBnk also contributes our thoughts and findings to inquiries and studies to help policy makers understand problems and identify solutions.
This month MyBnk submitted written evidence on the quality and reach of financial education for young people in and leaving the UK care system. This includes the results of the Money Advice Service funded independent assessments into our two flagship Young Adult programmes The Money House and Money Works.
You can read our submission, here.
If you would like to refer a young person to The Money House project or bring Money Works to your youth organisation, please contact [email protected].