This year, we were presented with the most rigorous, in-depth, comprehensive and international survey of worldwide financial skills ever seen: The Programme for International Student Assessment (PISA) report into Financial Literacy Skills for the 21st C, Students and Money.
Back in 2012 PISA tested 29,000 15 and 16 year olds in 18 countries who sat a two hour test comprising four papers. PISA ranked students in five levels of proficiency from basic to advanced. Scores for each country’s students were aggregated with a mean of 500. Top-score was Shanghai (603) and lowest Colombia (377).
Despite the UK not taking part, we are enthusiastic and supportive of the objectives of the PISA tests and the need for internationally comparable assessments to support policy choices, implementation and evaluation. However, the financial education test itself and its parameters are not above reproach.
We interpret PISA tests as not testing as stated, the likely ‘readiness of 15-year-old students for life beyond compulsory education and their capacity to use knowledge and skills’. PISA defines financial literacy as:
“A combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial well-being’
But the sample questions provided focuses on ‘skills’ and to a lesser extent ‘knowledge’. It does not sufficiently address ‘awareness, attitude and behaviour’. It is not surprising that mathematics are the most significant drivers of performance in the PISA tests.
For example consider one of the sample questions:
To receive a Full Credit (level 5 advanced capability) requires an answer that simply states Mrs Jones will have extra money and she will pay a lower interest rate. In the explanatory notes it is stated the student has all the information needed to assess the options. Many would disagree with this premise. Does the student possess all the relevant information to demonstrate financial literacy as defined above? What they do have is the information necessary to make a mathematical calculation and require the knowledge to understand what the words and symbols for interest, loan and monthly payment mean.
For PISA’s test to hold water, a full credit answer should include more information. What are the terms of the loans? Is the interest simple or compounded and how often is the principal adjusted? Are there set-up charges; early repayment options or penalties; does the loan require security or a guarantor?’ Financial literacy, may be better expressed as capability, includes the knowledge and confidence to ask these kinds of questions and the skills to interpret the answers. It is not just the maths and even that is incomplete without further information.*
A secondary concern is how results have been reported and how each community may use and interpret them. Headlines like: ‘Top of the Class Shanghai’ and ‘bottom of the class Colombia’ is not entirely useful. There is not a lot of difference between countries – 16 of the top 18 score in a range 466 to 541 or less than one PISA level (75 points) difference from the mean.
Recently the Financial Times featured a chart derived from PISA comparing hours of financial education versus scores by country. Many of us in the financial education sector strongly question any conclusion that financial education is ineffective based on this relationship.
Relevance and quality must be considered and indeed PISA shows the direct use of financial products is mildly correlated with performance. Like PISA we are concerned that many who deliver financial education are not skilled in doing so. MyBnk ensures all instructors are trained and tested in the relevant financial knowledge of the cohort they are working with. Furthermore, trainers are selected because they can actively engage with young people and are trained to bring the subject matter to life.
The need for financial capability has been universally accepted by civil society and policy makers. In England this September 2014, financial education becomes compulsory on the National Curriculum and the Money Advice Service (MAS) is currently preparing a UK Financial Capability Strategy. How financial capability is best achieved and measured are today’s questions. PISA is a substantial report which provides test-based, comparable scores which complement the vast majority of ‘self-assessed’ evaluations currently available. Like others, we will embrace some of the methodology particularly in maths and consider the conclusions of other points. We expect providers and policy makers to do likewise.
The UK’s provisional agreement to participate in PISA’s 2015 tests presents an opportunity to further our understanding on the effectiveness of financial education – however, the current model will not offer a full and true picture of the financial literacy landscape and its impact on the lives of young people.
Our objective of a financially literate and enterprise-driven generation includes the need to develop ‘attitudes and behaviours’ as well as utilise maths and literacy. Engaging young people with all facets of quality financial education is key to achieving that.
*In relation to PISA question: We can calculate the loan principal is (at best) adjusted annually Mrs Joans still owes 7400 zeds at year end. A more real-life example would adjust the principal monthly and 15% simple interest would equate to 14.5% of the initial loan. This matters as the loan would be paid off in seven years five months rather than eight years seven months. The worst case scenario is the principal is not adjusted through the loan period in which case it would take more than twelve years to pay off.
July 29, 2014 in Uncategorized |
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This September, financial education becomes compulsory for 11-16 year olds in English secondary schools in Citizenship and Maths via the new National Curriculum.
In the run-up we will be exploring what this means for young people and how we can help teachers implement effective, impactful and yes, fun (!), financial literacy lessons into their classrooms.
Here, we have asked 21-year-old Ruben Vega-Poblete, a recent Mathematics graduate from Bristol University, for his take on the opportunities and pitfalls presented by this autumn’s changes.
“Soon, our mathematics syllabus will include explicit references to teaching financially relevant ideas as part of the maths curriculum. This is not to be understated, it is very very important.
One of the age-old charges against maths is its perceived lack of relevance to the ‘real world’. In this new context, teachers can use financial education to ground mathematical concepts in the real world and make students more interested in the subject, while at the same time maths can give students a deeper understanding and appreciation of what goes on underneath the surface of the financial world.
While there is the obvious use of arithmetic that you need whenever you are dealing with numbers, the use of mathematics in financial matters goes much deeper than that. The calculation of interest and inflation, exchange rates and the assessment of risk all require a knowledge of and comfort with mathematical ideas that can be neglected when giving financial education. Not to mention that without a solid mathematical underpinning you run the risk of treating finance like a vague and unquantifiable concept. On the other side of the coin (no pun intended), statistics and probability are intrinsically linked to financial models and economics and if they are taught only as abstract concepts, an opportunity is missed to engage students and show the relevance of what they are learning.
From my recent studies I am very aware of both the potential maths has to engage students and help explain the world around them, and the possibility to simply bore them with esoteric knowledge that has seemingly no relevance to their lives.
It is not enough to add token references to finances or present contrived problems vaguely related to economics or enterprise, in essence, to just add a pound sign here and there. Our new maths curriculum has to be supported by the teaching of the real world applications, otherwise the financial context just becomes white noise as students only focus on getting the solution to the problem. A knowledge of percentages does not explain to a student why inflation happens or what interest is. Not to mention that there is a sizable gap in between learning the abstract concepts and being able to apply those ideas in a practical situation. When it comes to financial education, as with most education, there has to be a holistic approach that encompasses both the mathematics and the real world context that makes it relevant.
Even so, it is very tempting to separate the subjects, especially when dealing with lower ability students, who might struggle with the more technical aspects. Considering the general antipathy towards mathematics that seems to be held by students and society alike, there could be a perhaps reasonable fear that too much emphasis of financial education in maths could turn off the students who most need the life lessons financial education teaches.
However, the reality of finance is that it does involve heavy use of maths and we should prepare our students for that. So how does MyBnk deal with this? Thankfully, MyBnk does not avoid the maths that underlies the concepts. While still catering for lower ability students MyBnk teaches both how to deal with finance and enterprise in the abstract, as well as the mathematics that allows for an application of those ideas. It is about getting students comfortable with mathematics in a financial setting. This can be as simple as checking that accumulated spending does not exceed your budget, or it could be calculating interest over several years and comparing that to the rate of inflation to calculate real returns. The point is that the understanding of the concepts is reinforced with an understanding of the process that underlies them. If we want students to be genuinely financially literate we have to give them as many of the tools they need to deal with finances in the real world as possible. This includes both a conceptual understanding of finance and enterprise, and a mathematical underpinning to that understanding.
Without both you cannot give a student a complete financial education”.
See how MyBnk’s flagship school-based financial education programme, Money Twist, maps into the new National Curriculum.
July 22, 2014 in Uncategorized |
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Is age 11 ‘too late’ to start learning about money?
Many people ask why MyBnk only delivers financial education and enterprise programmes to 11-25 year olds. Firstly, it is where our expertise lies, secondly, we go, where the need is greatest.
MyBnk fully supports the campaign to include money lessons in the primary curriculum. However, whilst it is always good to start early, we disagree with the premise of a recent claim that for secondary school pupils it is ‘too late’ to start receiving financial education. In our experience we find it is most effective in transitional moments where there is a practical application – if a young person gains knowledge they cannot use, they are not necessarily gaining a skill. “Use it or lose it” springs to mind - this is what makes the addition of enterprise such a powerful catalyst for financial capability. Overloading seven year olds with tax and the banking system also risks switching them off the subject matter.
Capability needs to be built, but we can’t ignore the value of prevention and intervention at a time when young people need this knowledge the most. Money skills for those moving into independent living, managing a first job, calculating the cost of going to university – this is the kind of know-how 16-18 year olds are crying out for. Is it too late for them? The vast majority of older students never received any form of money lessons and that is why we are working tirelessly to help them, now.
The inclusion of financial education in Citizenship and Maths should provide a huge boost to 11-16 year old’s financial capability. Whilst only Maintained State schools have to teach it, that does not mean that Free Schools or academies will not – MyBnk has been working with over a hundred of them in the last seven years.
However, the National Curriculum is ultimately a set of subjects and standards, it does not tell teachers how to achieve the stated outcomes nor has extra funding been provided for financial education training. We are concerned teachers will not have time to become experts in this niche field in what is an already crowded subject area – Citizenship also contains sex education, politics and health.
Prevention is always cheaper than the cure and by teaching 11-16 year olds how to budget, bank and borrow responsibly today, we can prevent bad experiences tomorrow. It is never too late.
MyBnk is here to help teachers with curriculum mapping and award-winning programmes delivered at schools by trained and tested financial education experts. For more info, please contact firstname.lastname@example.org.
June 13, 2014 in Uncategorized |
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The first question we are asked by teachers, funders, parents and politicians is: “does it work?”
Since our inception in 2007, MyBnk has demonstrated a commitment to the monitoring and evaluation of our financial education and enterprise work.
From September, money lessons will become a compulsory part of the National Curriculum and stakeholders are rightly demanding evidence of longer term impact. This is why we have launched the new MyBnk Impact Centre.
Hosted by our long time supporters J.P. Morgan Chase and helping us kick-start this new and exciting phase were Anthony Browne, Head of the British Bankers Association, Caroline Rookes, CEO of the Money Advice Service, young bankers from our MyBnk-in-a-Box scheme at Mount Carmel Girls School, Syed Kamall MEP and our Patron Karl Johan Persson, CEO of H&M.
Achieving a financially literate and enterprise driven generation means we all need to add our piece of the puzzle, this is ours. In assessing outcomes over a longer period we see follow up assessments, in-depth interviews and focus groups enabling us to reach more young people and keeping our programmes relevant, cutting edge and contextually accurate.
Helping present his personal piece was Dan, 17, from North Hertfordshire Job Centre Pupil Referral Unit who recently took part in our Business Battle programme. After we took him from drawing board to marketplace in just four days, he told guests how the MyBnk programme brought discipline to his finances, got him a new job as a student teacher apprentice and is now helping him market his parents business.
“MyBnk have had a massive impact on me as a person and on my life. They helped me to sell myself in interviews, they taught me business skills and most importantly, to have confidence”. Dan (r)
This programme, like others, it’s resources, designs, materials and activities are rigorously assembled by our in-house team of educators, tested by young people and quality checked by experts. Education Officers receive weeks of training, observation, tests and every session is rated by teachers and young people. Every year we produce an Impact Report highlighting the effect of these projects.
The Impact Centre builds on this solid base as we develop longitudinal studies and understand behavioural change. This will help us double our reach to arm 40,000 young people with money and enterprise skills, expand into new areas and develop fresh programmes in 2013/14. MyBnk’s piece of the puzzle is to work tirelessly at getting it right.
To share best practise across our sector, we have teamed up with other providers like pfeg and The Money Charity to form a new Youth Financial Capability Group to co-ordinate efforts in the classroom and beyond.This work is going to benefit everyone interested in financial capability.
As a charity, none of this is possible without the individuals, companies, trusts and foundations that give to this work. Every donor and funder helps completes our puzzle – without you we could not continue our important work.
Financial Education doesn’t need to be puzzling.
To help, to build, to impact, please contact us: email@example.com.
June 3, 2014 in Uncategorized |
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We have said it before and we will say it again: financial literacy needs a lot of different parts to work. Parents, education, charities, financial services, media etc. But what about protest?
Government spending, connecting the micro to macro economics and tax are covered extensively in our financial education sessions. It causes many debates and helps young people understand the money maze they will soon step into. Our friends at Bite the Ballot also do this with the aim of registering young people to vote.
Much is made of the youth vote, yet data suggests few exercise their right to use it – however, logic suggests the more informed they are, the more likely they are to take part. This is why we were intrigued by the Occupy movement’s new educational programme which explains the financial crisis by taking you to the very places where it happened. We recently took our Youth Advisory Panel along to see what it was all about
Max from Occupy explains:
Occupy London Tours – Opening up the Financial Crisis
When was the last time you saw the inside of an investment bank, or poked your head round the door of a credit ratings agency? (what even is a ‘credit ratings agency’?!). When was the last time the news told you about the City of London Corporation, its Lord Mayor, and secret dealings with the government on behalf of the ‘Square Mile’ – home of the UK’s financial services industry?
Our guess is never – or at best, a long while ago.
But the truth is, if you want to understand money, power and the financial crisis (and you need to if you want to change the world), then getting under the skin of the banks, insurers, mutual’s, private equity firms, hedge funds, lobby groups, accountants, regulators and credit ratings agencies – to name a few! – that make up the covert world of high-finance, is a must.
Luckily (perhaps), global finance has its global HQ here, in London. And that’s where we come in.
Occupy London Tours began after a teacher named Liam, and his friend Duncan, got involved in the Occupy movement that burst onto the world stage in autumn 2011. Camps occupying locations in hundreds of world cities brought together hundreds of thousands – if not millions – of people united in opposition to a political and economic system they saw as corrupt, unrepresentative, unfair and untenable. A simple slogan summed up their message:
“We are the 99%”. The rule of a tiny elite – the 1% – was in the firing line.
Liam and Duncan decided to design free, alternative walking tours of London’s three financial districts: the City of London (the UK’s smallest city) at the heart of London’s story of money and power; Canary Wharf, the cluster of towers that now houses most of the UK’s bankers; and Mayfair, the West End quarter that secretly houses hedge funds, private equity firms and traders who toss billions round the globe.
Each tour lifts the lid on the inner workings of the companies pulling the strings beyond the public gaze, shifting the future prospects of young people the world over – with little or no accountability. Through stories, games – and hard facts – we throw open the secretive world of finance and politics for all to see.
It’s never been more important for young people to understand the world they’ll shape – what better place to begin than with a free trip into the beating heart of money and power.
For more info - http://occupytours.org/book-a-place/
May 1, 2014 in Uncategorized |
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Financial literacy needs a lot of ingredients to work. What we do, financial education, is just one of those. Parenting, peer pressure and culture all play a role, media and advertising, a potent one.
We work hard to counter ill-informed attitudes and beliefs towards money, spending and debt. At the beginning of every workshop, pupils complete a form asking basic financial questions to gauge their ability. The results are mixed, they know the slogans and terminologies but many misinterpret their meanings – APR and AER being the most prevalent.
That is why we have campaigned for restrictions on payday lender adverts before the 9PM watershed and supported Paul Bloomfield MP’s High Cost Credit Bill.
Recently the Advertising Standards Authority ruled that a high profile payday ad “misled” viewers – implying that an interest rate over over 5000% was “irrelevant” when taking out a loan. Earlier in the year the government decided against a curb of advertising rules on the industry.
Payday ads already make a disturbing impression on young people in terms of brand awareness and desensitising debt, now we learn that that impression is also misleading.
It makes our job of arming youths with money skills even harder when 13-year-olds are listing payday as a source of income along with wages and investments.
Us adults are bamboozled by misleading offers and are used to being lied to, the government needs to look again at how financial services pitch and place their products and protect our young people from marketing which allows dangerous financial habits to form.
Parenting and peer pressure all play a part in developing our attitudes towards money, but continuing practices like these risks rendering the inclusion of financial education into the National Curriculum this September quite irrelevant.
April 9, 2014 in Uncategorized |
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The final Days of Learn Money Week saw attention turn to the markets of London’s iconic Camden Town and MyBnk’s biggest ever one day money marathon at a single school.
On Day Six, MyBnk’s experts took enterprise education to the streets as teams from City & Islington College took their products to market in our Business Battle programme. they doubled their money making nearly a £100 from MyBnk interest free loans. As well as gaining valuable experience in their first enterprise outing, they learnt how to budget and cost out a project by doing it for real. Winning loan application teams from Bishop Chandler’s Catholic School also started their enterprise journey as we began turning their business ideas into a reality.
“I’m doing a business course BTEC and during the MyBnk session I’ve learnt about team work, it was a chance to try something new and be creative. We had a look at budgeting and our team took out a £44 loan. These skills are important for use in the future, I want to have my own business, either a salon or nursery. I’ll be going to college and university to achieve this. I’ve enjoyed the MyBnk session but I wish we had more than one day for the market stall so we could make even more profit!” Farzana, 15.
Our experts where also on hand to help 650 11-14 year olds at the Jewish Community Secondary School and Tower Hamlets Pupil Referral Unit understand the origins of capital and how it flows between institutions by discovering the history and features of money, forms of payment and currency & exchange rates. The Money Twist project also examines budgeting, youth employment, minimum wage, needs and wants, risk and saving.
“It’s important for young people to learn about this so they aren’t clueless when they’re older and won’t get into debt, this can help them avoid it. I’ve learnt about the security features of bank notes today and I enjoyed the session, especially learning the history of money.” Noah, 13, Jewish Community School.
That is a wrap folks for Learn Money Week 2014, stay tuned for the winners of the A to Z of money competition and a worldwide roundup.
March 19, 2014 in Uncategorized |
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A huge thanks to young civil servants who powered through a 24 hour spinathon to raise money for MyBnk!
Deep in the heart of Whitehall, members of the Fast Stream team sweated it out on several alternate four hour cycle tours. Not that they needed any extra pressure to cross the finish line, their bosses turned up! Vince Cable, Business Secretary and University Minister David Willetts popped in to give some encouragement and to find out about MyBnk’s financial education and enterprise programmes.
So far the 19 strong team has raised over £900 – meaning we can arm nearly 100 young people with key money management skills or give scores of youths their first enterprise experience in a live market loans challenge. There are lots more challenges to come, including scaling the Yorkshire Three Peaks and next month the team will be collecting donations at tube stations around London.
“We’re doing a spinathon because MyBnk is giving support and valuable teaching to young people which is important especially in today’s climate. It’s a fun way to raise money and a good challenge as well as getting the wider department involved as there’s a lot of people in this building that are interested in enterprise as well so it’s really good to showcase what MyBnk do.” Ruth, Department for Business Innovation and Skills.
Show your support and donate, now!
Also, keep up to date on their latest escapades via their Twitter page.
March 19, 2014 in Uncategorized |
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Day 5 of Learn Money Week saw us gain the backing of Elizabeth Truss MP, the UK’s Education Secretary and new countries joining the financial education jamboree. It also saw enterprise come to to fore once again.
She praised the scheme as an “excellent opportunity to boost awareness of financial management among young people” and will “provide a major boost to the financial awareness of young people and will ensure they leave school with the budgeting, money management and financial skills needed to succeed.”
570 young people in India took part in activities at PSGR Krishnammal School in workshops linked to coins, currencies and transactions as well as submitting A to Z of Money Posters. Across in Lisbon, the Global Shapers Community celebrated a secondary school’s 50th birthday by helping 150 students with Learn Money resources.
In three schools in Dusseldorf, Germany, 150 students aged 8-10 discussed spending, investing and charity – the session was led by one of the original founders of Learn Money Week, Henrik Naujoks from Bain & Associates.
Back in the UK, our experts where also on hand to help 200 11-14 year olds at Crown Woods College understand the origins of capital and how it flows between institutions by discovering the history and features of money, forms of payment and currency & exchange rates. The Money Twist project also examines budgeting, youth employment, minimum wage, needs and wants, risk and saving.
Enterprise also played an important part in bringing money discipline to youths, with young people. Youths at City & Islington College ramped up their enterprise projects ahead of selling at Camden Market this Saturday. Young teens at Barnet & Southgate College have been wrestling with the pounds and pence as they reported on their Enterprise-in-a-Box project selling ethical products into the community – teams made nearly £200 profit in their first enterprise experience.
“It’s definitely important for young people to learn this for the future so they have more opportunities and experience in running their own businesses. I’ve learnt new skills such as how the money works and how to persuade people to buy your product, you need confidence, body language, eye contact and communication with your customers. We talked about budgeting to calculate the profit for our market, I’m ready! Lauren, 16, barnet & Islington College, Business Battle, MyBnk.
Young people living in sheltered accomidation at Peabody Housing Asociation addressed independent living in seven 45 minute 1-2-1 Money Advice Service sessions. Still in the UK, AXA Insurance continued their partnership with Redstart to give young people at Upton Park School lessons in budgeting, assets and wealth, liabilities, risk and Dragons Den style enterprise challenges.
In the USA and South Africa, Operation Hope delivered their Banking on our Future workshop, helping hundreds of youths in High Schools and youth groups take control of their money by learning about empowerment and responsibility.
The National Skills Academy brought Barclays Money Skills weeks to 23 schools and colleges across England to help youths manage their money, reduce financial stress and increase their chances of achieving their financial goals. They were also training staff from housing associations and credit unions in money management programmes through the Lloyds Money For Life programme.
Be Better and Citi Bank China helped youths tackle saving and consuming, continuing their events for youths between ages 10-17 years participating in exciting activities such as team survival games on financial topics, bank visits, workshops on money matters and social topics and more.
Day 6 brings financial education to the streets of Camden Town Market, London in an all out Business Battle for City & Islington College.
March 14, 2014 in Uncategorized |
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Elizabeth Truss MP has given her backing to our Learn Money Week campaign and financial education as we zoom past the half way stage of an all-action expedition for financial literacy.
As MyBnk reached thousands of young people across London, the North West and North East of England, partners in 15 other countries also armed tens of thousands of young people with key money skills like budgeting, borrowing and banking.
We also helped ring the opening bell at the London Stock Exchange, hosted an expert-led financial literacy panel debate and featured Guest Blogs from Syed Kamall MEP, Mumsnet, Broadstone and others.
There is still three and a bit days to go including live market enterprise challenges, a BBC Radio London special on Sunday 6PM GMT and our biggest ever one-day financial education project involving 650 pupils at the Jewish Community Secondary School.
Education Minister Elizabeth Truss said:
“Managing money and planning budgets are important life skills that help people make informed decisions. Learn Money Week is an excellent opportunity to boost awareness of financial management among young people.
“Financial education is so important, which is why, for the very first time, the rigorous new maths curriculum will ensure primary and secondary school pupils will be taught about personal finance, such as loan repayments and interest rates. Secondary school pupils will also learn financial literacy in citizenship lessons.
“This will provide a major boost to the financial awareness of young people and will ensure they leave school with the budgeting, money management and financial skills needed to succeed.”
March 14, 2014 in Uncategorized |
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