20 March 2017

Professor Tina Harrison argues a joined-up approach is needed to improve young people’s financial capabilities.

Having dutifully doled out piggy banks and savings books in our classrooms for decades, you could be forgiven for thinking we’ve cracked financial education for young people.

But the truth is, many of Scotland’s school leavers are as confused about money as they’ve ever been.

New research from the Money Advice Service (MAS) found 31% of 16-17 year-olds in Scotland don’t have a current account. And of those that do, a quarter (26%) have no experience of putting money into it. A worrying 55% are also unable to read a payslip.

So what’s going wrong – surely we should have come up with a solution by now?

During our own recent analysis, we found a large number of young people still don’t understand the help available to them.  Many thought MAS and Citizens Advice Bureau only helped those in financial difficulty, while there was also a perception that financial advisors were only for the rich.

Only 4% of young adults had consulted one and just 18% had asked their bank for information or advice.  The majority didn’t feel confident that they could trust the support on offer. While 17% of young adults in debt believed they’d have to pay to access debt advice.

Parents remain the most trusted source of financial guidance for 40% of young people. But they’ve often suffered the same lack of financial education, so may not be the best financial mentors.

Well over a third of young adults are turning to the internet for information, leaving them exposed to potentially unchallenged and unregulated information and advice. This leads to real financial vulnerability at key points of transition in their lives.

If we are going to tackle this problem, we have to take a joined-up approach.

Engaging young people in managing their money from a young age is a vital step to giving them the skills and confidence needed to cope financially in later life. Schools have a vital role to play in this.

More than 90% of young people who received financial education in schools said they found it useful, though less than half (46%) of those surveyed by MAS said they’d actually received any financial education.

Universities also have a duty to make sure our undergraduates have the help and support they need to understand their student loans, how to pay rent and manage their budgets while studying.

Employers must understand the key role they can play in shaping young people’s understanding of tax, savings and pensions. Meanwhile, government must do more to ensure families have the information they need to continue to guide their young adult children toward the right financial choices.

Some of these changes are already happening, including work to build financial guidance packages into the Modern Apprenticeship Scotland programme.

This week sees the launch of the first ever Scottish Financial Education Week (20 – 24 March), a five-day programme of events designed to draw attention to the need for a better approach to young people’s financial education.

Bringing together work by the Scottish Government, the Business School, Young Scot and Lloyds Banking Group, it is a great start. But it will only work if we view financial capability as a journey, not a destination.


Professor Tina Harrison is Personal Chair of Financial Services Marketing and Consumption at University of Edinburgh Business School. Together with Dr Caroline Marchant she’ll host a seminar and interactive webinar on supporting and developing young adult’s financial capability at the School on 23 March 2017.