A countdown to disaster?

A survey carried out for The Richmond Project has revealed that many young people have a poor understanding of basic financial concepts, such as inflation and compound interest.

The survey of 10,000 people revealed that younger generations have a worse grasp of their finances than their parents.

The Richmond Project, a charity set up by former Prime Minister Rishi Sunak and his wife Akshata Murty, exists to ‘transform lives by numbers’.

Its survey concluded that more than half of adults aged between 18 and 34 scored ‘poorly’ or ‘very poorly’ on a financial literacy test, compared with just 20 per cent of those aged 65 or older.

The research also found that adults over 55 with GCSE-level education have better financial skills than even postgraduates in the younger generations.

While it is true that older people learn more as they go through life, the survey should ring alarm bells in every school in the country – and in the Department for Education.

A lack of financial literacy is due to poor numeracy skills. And a lack of numeracy skills is because children are not taught them.

Compound interest and inflation require an understanding of percentages.

This involves understanding the link between decimals, fractions and percentages, which are just different ways of presenting data.

While life lessons will give older people a better grasp of some concepts, they were taught maths in a more traditional manner – four rules of number, fractions, decimals, two rules of percentages, then ratios and probability and so on.

Unless one has an understanding of the basics in the maths, the concepts of compound interest and inflation will be beyond many people’s mathematical grasp.

Progressive maths teaching took hold in the late 60s and 70s and held sway right through to the 2010s – and it has been a disaster.

This is still playing out in Wales and Scotland whose curriculums are based on these ideas.

In progressive maths the emphasis is on exploration with no coherent learning of basic algorithms or the teaching of maths in a structured way and step-by-step manner.

The new primary curriculum that was published in the 2014 – which I was involved in working on – did in some way mitigate these issues by focusing on proper content and some structured learning of the basics.

It also emphasised the importance of learning of times tables up to 12 by the end of Year 4, which was essential.

However, the 2014 curriculum did not go far enough.

For example, on the teaching of percentages, children were supposed to learn how to find a percentage, and this is fine. But they were not supposed to learn how to find an amount from a percentage.

This did not make sense and I constantly pointed it out. A fuller understanding of percentages can only be achieved if both rules are learnt. This should be taught in primary school.

The basics must be in place by the end of primary education and then it can be built upon in secondary maths.

Those who have done well at GCSE maths will be able to grasp the concepts of compound interest and inflation because the foundational knowledge is in place.

We cannot afford another generation coming through school without the knowledge to understand financial matters. It is in their interest to learn them – and in the country’s.

I welcome The Richmond Project’s survey and applaud its aim to ‘transform lives by numbers’. I hope this survey prompts the necessary changes.

ends