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.