For many school leavers the world of work, wages and debt can come as a shock, so some Gwent teens and an AM are calling for more financial education in schools, as EMMA MACKINTOSH reports.
MAKING the shift from the world of school to the reality of the world of work is not easy, and some schools are not dedicating enough hours to preparing their pupils for it, according to a Plaid Cymru Assembly Member who has tabled a Bill to the National Assembly dedicated to the subject of financial education.
It is not unprecedented. From September, financial education will be a compulsory part of the curriculum in England, and students here in Wales are already discussing their desire to learn more about the finer details of mortgages and interest before they have to deal with it for real.
Last month representatives of the Caerphilly Youth Forum told members of the council's education scrutiny panel that they would like the opportunity to have a say what's on their curriculum - namely, more financial education.
For AM Bethan Jenkins the need to have financial education should be enshrined in legislation, with current offerings at Welsh schools varying too much, she says.
"I [have met] young people who were saying they don’t have that skill in school where they would be able to manage their own money, pay rent, pay a student loan, cope with the world of work," she explained. "When I met with employers they want to take on young people who can manage themselves sufficiently, and especially in this area it’s about having the confidence to do that. The only way people can have opportunities is if they feel they have the skills to start their own business, get a job. This is a vital skill."
Her bill, which must be introduced by July according to Assembly rules and is currently going through consultation, seeks to "increase prosperity in Wales by improving the financial education and literacy of our citizens", namely by "improving financial capability" among school-age children and young people by making it a legal requirement that financial education is included in the school curriculum.
The bill is also designed to strengthen the role of local authorities "in helping people avoid falling into financial difficulty" by requiring them to adopt a financial inclusion strategy, promoting financial literacy and addressing issues around financial inclusion.
"People can be on very good wages and not very good with money," said Ms Jenkins, who includes statistics in the overview to her bill that 70 per cent of 18 to 24-year-olds surveyed in 2008 were in debt, and the Citizens Advice Bureau Cymru has experienced a fivefold increase since 2012 in the number of people who've had problems with a payday lender.
"The bill is preventative and reactive. The power to deal with loan sharks lies with the UK Government, so this would get local authorities to come up with a financial education strategy which is monitored.
"Swansea council has a working group looking at loan sharks and trying to combat this very proactively," she said. "In an ideal world I would’ve legislated to stop certain companies from opening up on our streets, but that’s not possible in this bill. If you can give people enough [information] to understand APR you can potentially stop it that way."
At the moment financial education is very patchy across Wales, claims the AM, who is calling for school leadership teams to make time for financial literacy sessions despite being told by some students that they feel it should be up to their parents to teach them about finances.
Her bill claims that despite the Welsh Government's Financial Inclusion Strategy being reviewed in 2011, and the setting up of a government Financial Inclusion Delivery Group, that "more needs to be done" by making legislation governing the way financial education in delivered, and how local authorities can contribute to promoting "financial literacy".
It would give financial education a similar legal status to Personal and Social Education (PSE) and work-related education.
"There are 10 to 20 organisations that go into schools, quite often the service they offer is free," she said. "This bill will show there are people out there wanting to go in to help students."
Welsh Government insists a lot of good work is already being done in the area of financial education.
A spokesman said: "Financial education for young people aged 7 to 16 has been part of the school curriculum in Wales since 2008 - through mathematics, Personal and Social Education, and careers and the world of work. The new National Literacy and Numeracy Framework (LNF), a statutory curriculum requirement from September 2013, also reinforces the importance of financial education by setting out the level of skills required to manage money for each year from Reception to Year nine. We're working hard with lots of stakeholders to improve financial literacy but we don't believe a new Bill and more bureaucracy is the answer.”
When asked if the proposed Bill has cross-party support, Ms Jenkins said: "When it was successful at the first stage no one really spoke against it. It will be integral when I get the consultation in to see what can and can’t be done.
"There is a lot of cross party support. I’ve met with [minister for communities] Jeff Cuthbert regarding the credit unions and local authority side which is good but he wasn’t addressing the education side.
"I’ve asked the education minister to have a meeting," she said. "I’ve been to Scotland to meet the Scottish qualifications authority and they have been really open and friendly. Organisations like Go Compare and the financial writer Martin Lewis have said they see the necessity for [this], I want to build momentum so it’s a no-brainer."
Any cost implications will be part of the final bill, said the AM, who must "lay" the bill by the end of July.