Across Europe inflation remains high, interest rates are rising and the economic climate is proving challenging for almost everyone.
However, the crisis will be hitting young people harder and disproportionately to others, with underserved youth and young people from lower socio-economic backgrounds in a particularly vulnerable situation.
As young people are navigating a period of sustained economic uncertainty and market volatility, empowering them with the knowledge and tools needed to make informed financial decisions is more critical than ever.
Without this education, the next generation will be woefully unprepared to manage their finances and at risk of making avoidable mistakes that could set their adult lives back before they even begin.
To solve this problem, financial education needs reform.
Despite the clear societal and economic value of helping young people avoid financial pitfalls such as high debt, bad credit and lack of savings, the government currently lags behind in delivering effective financial education to young students.
According to the "Young persons' money index 2022/23" from the London Institute of Banking and Finance, only 8 per cent of those aged 15 to 18 cited their school as a main source of financial education, with 68 per cent citing their parents and 19 per cent claiming to be "self-taught".
An education system that relies so heavily on parental figures to impart financial advice risks many young people being ill-prepared for new and emerging financial threats.
Additionally, many children – especially those from a lower socio-economic background and underserved youth may not have access to a trusted adult confident in their own financial literacy, having been failed by the same outdated education system.
The Money and Pensions Service's Financial Capability Survey, carried out in 2018, revealed that 39 per cent of adults did not feel confident managing their money; 11.5mn had less than £100 in savings and 9mn were in serious debt.
Policymakers must work with education systems and bodies to address these challenges.
Reform
For a start, the current national strategy for financial well-being should aim to provide all school-aged children with financial education by 2030, rather than the current target of 2mn more children.
Across Europe, the situation is just as dire with the 2020 OECD international survey showing that around half of the EU adult population does not have a good enough understanding of basic financial concepts.
In response, the European Commission has been working on a financial competence framework for adults in the EU to tackle financial literacy concerns, with public and private organisations able to build on the framework to create new initiatives or governments to use the framework to develop new policies and programmes.
There is undoubtedly an eagerness among young people to see financial education embraced in the curriculum: 82 per cent of respondents to the "Young persons' money index" survey expressed an interest in learning more about money and finance in school.
