Watchdog says Financial Education is Ineffective
29/07/2008
Research from the Financial Services Authority (FSA) suggests that teaching people about money-management probably won't help make them any better off.
The FSA study examined the effectiveness of different educational approaches to improving financial knowledge and capability. One of the findings was that including personal finance in Maths lessons not only failed to improve students' financial understanding, it actually had a negative impact on their overall maths skills.
A spokesperson for the FSA, David Whitely, said: "We can write on paper that we've reached x million people, but the true test is whether the UK population is more financially capable."
The FSA study concluded that there is very little evidence to suggest that financial education programmes change students' behaviour.
Behavioural finance theory suggests that even if people do learn new skills, they are still unlikely to change their financial behaviour, because this is driven by fundamental human biases.
The research comes two years into the Government's £90m five year national strategy for financial capability. The FSA's chief executive Hector Sants last week listed financial capability programmes as one of the regulator's achievements.
The FSA study examined the effectiveness of different educational approaches to improving financial knowledge and capability. One of the findings was that including personal finance in Maths lessons not only failed to improve students' financial understanding, it actually had a negative impact on their overall maths skills.
A spokesperson for the FSA, David Whitely, said: "We can write on paper that we've reached x million people, but the true test is whether the UK population is more financially capable."
The FSA study concluded that there is very little evidence to suggest that financial education programmes change students' behaviour.
Behavioural finance theory suggests that even if people do learn new skills, they are still unlikely to change their financial behaviour, because this is driven by fundamental human biases.
The research comes two years into the Government's £90m five year national strategy for financial capability. The FSA's chief executive Hector Sants last week listed financial capability programmes as one of the regulator's achievements.
