First, a story . . .

Two young friends are out on the town. The ceremony is over, the obligatory ‘tossing-the-mortarboards’ pic is getting dozens of likes and now, with university behind them, it’s time to celebrate. 

Risha and Jodie, both 21, chat excitedly as they head to their favourite bar. They’ve each secured a great job at the same firm, in the same position and - as a couple of drinks lead to discovering - on the same salary. 

Fast forward 57 years. 

Risha and Jodie, both recently having become grandmas, remain the best of friends. Their lives have unfolded across almost perfectly synchronised milestones; marriage, a house, children and promotions, all happening for each woman within weeks of the other. 

There is one big discrepancy though: Jodie is now more than £1 million poorer than Risha. How can this be possible? The answer goes all the way back to when they were 7, and stems from the fact that, even if two people walk the same path, the way each chooses to tread it can lead to very different destinations. 

The great life determiner we don’t teach

While the happy young graduates in our story are fictitious, the way in which subtly different choices made their financial paths diverge is not. While life’s big events are memorable - passing your driving test, getting a job, moving into your first home - they are the culmination of thousands of smaller choices quickly forgotten, choices determined by the understanding we gain, the skills we acquire and the attitudes we form.

As school leaders, we strive to better equip pupils with the understanding, skills and attitudes to make better choices and have more agency in the world. And, by and large, it’s working; education in schools has clearly improved. The average Y6 pupil leaves primary school today significantly better at maths and science than 30 years ago. Yet, when it comes to helping pupils develop the knowledge, mindset and attitudes necessary for financial success, improvement over those same three decades amounts to very little: almost three quarters of the workforce today say they had no money management lessons at all in school. 

But why is this? Few could seriously argue that financial literacy simply doesn’t matter enough to teach. Depending on just how severe 68-year-old Jodie’s money situation is, she may be in the same boat as over 9 million UK adults are today, with less than £100 in savings. Perhaps she is one of the 1 in 10 elderly who are still working past retirement age, in many cases because their pension is insufficient or non-existent. Maybe she suffered a devastating financial loss through falling victim to a scam, which better financial literacy would have equipped her to avoid. Jodie could well be one of the almost 13 million UK adults with crippling levels of debt. 

Worst of all, if she can only afford to live in one of the most economically deprived areas of the country, Jodie could live for 19 years less than those in the least deprived areas. Quite simply, poor financial literacy demonstrably raises the odds of limited life chances, poorer mental health and fewer years on the planet. 

If this doesn’t matter enough to teach, it begs the question, what does?

Why KS3 is too little too late

There are many other excuses given as to why a thorough, purposeful financial education is not on the primary curriculum: “it’s the responsibility of parents to talk to their children about money” (even though financial illiteracy is rife among the adult population), “it’s too sensitive a topic to ask teachers to address” (as opposed to sex, mental health and drugs - all statutory KS2 PSHE topics . . .), “it’s not much use to primary pupils, since they don’t have to make financial decisions at that age” or “they’re just too young to grasp the concepts”. 

While a financial education curriculum component did become statutory in secondary schools in 2014, policymakers may have had one (or all) of the above reasons in their minds when they stopped short of mandating it in primary. The problem is, all these “reasons” are wrong.

Is primary too early for financial education to be relevant? Research by the Money Advice service (now the Money and Pensions Service), in conjunction with Cambridge University showed in 2013 that children begin forming attitudes and habits towards money from age 7. The University of Michigan demonstrated five years later that 5-10 was the crucial age window, after which such attitudes and habits were hard to alter. As for the claim that primary-age pupils are too young to ‘get it’, this was debunked ten years ago with a University of Wisconsin study, showing that children in this age group absolutely can grasp key financial and economic concepts, and that it makes a lasting difference when they are given the chance to do so.

Are primary-age pupils too young for it to be relevant? Consider how being a pre-teen in 2025 differs from when we were 10 or 11. Did strangers DM you offers of a mysterious but tempting ‘job’ with low hours and high pay? Did your favourite video game contain enticements to buy extra lives, ‘power-ups’ or to gamble by splurging on ‘loot boxes’? Did you have a favourite influencer or streamer, whose constant appeals to support them via Patreon had you itching to part with pocket money? For the last decade or more, a gradual process of ‘financial adultification’ has steadily increased the decision workload that younger and younger children have to bear when it comes to money. Without the financial savvy to face these decisions well, the consequences can cost thousands, as they did in March this year for one 8-year-old and her parents (over £8500, to be precise). Simply put, financial education in the 2020s is now essential, not just as part of a primary/prep school’s curriculum, but also its pastoral and safeguarding provision.

Curriculum Policy: change on the way?

There are signs that the mood music is intensifying around primary financial education, and that change may be on the way. In May 2024, the Commons Education Committee urged compulsory financial education in both primary and secondary phases, a call backed publicly by none other than Martin Lewis. While this has not yet been enacted, in January 2025 the Government absorbed the issue into its 5–18 Curriculum and Assessment Review, whose conclusions are due for publication in the coming months.

So it could be that school leaders are soon obliged to get financial education into primary curricula. However, whether or not it becomes statutory, the issue carries stakes so high for the future lives of our pupils, the questions should be when and how - not if - we make it happen in our schools. 

The base of the iceberg: economics alongside finance

For any primary/prep school leaders looking for planning or resources to build a financial education curriculum, the few options currently available come with many limitations. Although most of what is out there is free, none of it provides fully comprehensive coverage and all of it focuses on the relatively narrow ‘pocket money and piggy banks’ aspects of the overall topic, e.g the basics of budgeting, prioritising, saving, what banks are for, etc. 

While coverage of these areas is important, to focus on these alone is a missed opportunity. To illustrate why, consider the age at which you began to understand key principles that shape the ‘big picture’ context in which we make financial decisions. When did you learn . . .

• That money is only one finite resource that we humans must spend wisely (alongside our time, capacity to expend mental/physical effort, etc.)?
• That when you make the choice to pursue something, you inevitably give up the chance to pursue many other things?
• That most things get less valuable over time, but a few things tend to get more valuable over time?
• That when lots of people want something and/or there isn’t enough to go around, people will pay more for it?
• That the pounds and pence in your bank account buy less and less with each passing year?

Are there any of the above that you wish you’d learned sooner? These concepts of ecocomics, and many more, are bigger than those concerning individual personal finance. Yet, they have a huge bearing on what sensible financial decisions look like: in the late 1980s, when interest rates topped 14%, saving cash was a choice that paid off richly; in 2020, when the base rate was 0.1%, the same choice would have made you poorer than you started. 

While primary-age pupils don’t need to grasp every nuance of monetary policy, understanding that a good decision in one circumstance can be a poor one in a different situation is important in shaping a money-savvy mindset. In our fast-changing world, this is a key component of any ‘critical thinking’ toolbox, and can also cast a new light on other subjects in the curriculum; all of these questions arise at the point where subjects we already teach intersect with economics:

• Maths: If I can make 8 glasses of lemonade and 5 cakes in a day and you can make 9 glasses and 7 cakes, what should we each make if we want to make the most profit?

• History: Why did ancient civilisations build monuments and invent writing?

• P4C: What do we need in order to live happy and fulfilled lives?

• PSHE: What impact do our choices have on our health and wellbeing?
• Geography: Why do so many people move to London, even though it’s expensive?

As the US Council for Economic Education found in a 2022 study, exposure in schools to both economics and personal finance is critical, as they inform and reinforce each other. The Bank of England also clearly perceives this link, having recently launched a project to widen the appeal of economics study at secondary level. The point here is simply this: if we go to the effort of implementing a financial curriculum without incorporating an economics lens, we leave much of the potential impact on the table.

Conclusion

Let’s return to our story of Risha and Jodie. How did the latter end up over £1m poorer by age 68? Here’s how their paths diverged:

• After starting their first graduate job, Risha immediately began setting aside £200 each month to invest in a stocks & shares ISA
• Jodie decided to delay doing the same until she was earning more. Besides, she’d only just started earning - why shouldn’t she enjoy the rewards of her efforts in the here and now?
• At age 30, Risha stopped contributing to her ISA. With a mortgage to pay and a wedding to save up for, she just let her modest nest egg to keep building slowly with its annual growth and dividends.
• Meanwhile, when Jodie turned 30, she decided now was the time to start investing. She copied Jodie’s plan and started putting £200 each month into the same type of account as Risha.
• Jodie stuck to her plan and kept paying in £200 each month, for 38 years (a total of £91,300 contributed). Her investment pot grew to £1.3m
• Risha had only contributed £21,600 over her 9 years of paying in. Yet, thanks to starting earlier, the following 38 years of growth meant she reached her 68th birthday with a £2.35m portfolio

This story is adapted from one told by American finance guru Dave Ramsey. The first thing most want to do upon hearing it is go back to being 21 and make some habit adjustments. The next (and more feasible) instinct is to pass the lesson on to those that are yet to be 21. The more collective awareness and will there is to make financial education happen early, the more of today’s pupils can reap the rewards of choices like Risha’s in the years to come.

P.S - As well as being a full-time headteacher, I’m also the founder of Tykeoons, which offers a comprehensive curriculum and resource hub for financial, economic and entrepreneurship education for primary/prep schools. If you found this article useful, please follow us on LinkedIn to get a free resource and research-informed updates each week. Get our free introductory economics module at www.tykeoons.co.uk.

Sources

Bank of England (2022) Broadening the appeal of economics in schools. London: Bank of England.

Council for Economic Education (2022) Survey of the States: Economic and Personal Finance Education in Our Nation’s Schools. New York: CEE.

House of Commons Education Committee (2024) Compulsory financial education in primary and secondary phases. London: UK Parliament.

Lewis, M. (2024) Evidence to the Commons Education Committee on financial education. London: UK Parliament.

Money Advice Service and University of Cambridge (2013) Habit formation and learning in young children: Money attitudes and behaviours. London: MAS.

Money and Pensions Service (2023) Financial Capability Strategy for the UK. London: MaPS.

Ramsey, D. (2003) The Total Money Makeover. Nashville, TN: Thomas Nelson.

University of Michigan (2018) Early formation of financial habits and long-term outcomes. Ann Arbor: University of Michigan.

University of Wisconsin-Madison (2012) Can young children learn financial concepts? Evidence from experimental studies. Madison, WI: UW.

Further Reading

Lusardi, A. and Mitchell, O.S. (2014) ‘The economic importance of financial literacy: Theory and evidence’, Journal of Economic Literature, 52(1), pp. 5–44.

OECD (2017) OECD/INFE guidelines on financial education in schools. Paris: OECD Publishing.

Perry, V.G. and Morris, M.D. (2005) ‘Who is in control? The role of self‐perception, knowledge, and income in explaining consumer financial behavior’, Journal of Consumer Affairs, 39(2), pp. 299–313.

Shim, S., Barber, B.L., Card, N.A., Xiao, J.J. and Serido, J. (2010) ‘Financial socialization of first‐year college students: The roles of parents, work, and education’, Journal of Youth and Adolescence, 39(12), pp. 1457–1470.

World Bank (2014) Global financial development report: Financial inclusion. Washington, DC: World Bank.

This piece was written by Tej Lander, Headteacher at Norfolk House School, who will be speaking at the Independent Schools Conference 2025, co-located with the Schools & Academies Show. You can register for free here.