For immediate release: Tuesday 4 August 1998

AUTIF SCHOOL REPORT – SUMMER '98 PARENTS NEED TO TRY HARDER

Understanding personal finance is increasingly recognised as being of fundamental importance to one’s independence. Many bemoan the fact that they were never taught anything about it at school. It is therefore surprising to discover that such an extraordinary proportion of the population (72%) either believes it is now a core subject in the National Curriculum for secondary education or does not know. It is not part of the core curriculum.

This is the latest result from the Financial Awareness and Consumer Education Tracking Study (FACETS) which is carried out by the Association of Unit Trusts and Investment Funds (AUTIF) each month. During the last 12 months the study shows little progress amongst all adults in their ability to respond correctly to this question despite the Government’s focus on education.

Most significant is the lack of awareness amongst those with children aged between 11 and 14 in the household. 36% gave the right response, but 17% were wrong, with 47% answering ‘don’t know’.

The best informed were men in the 45-54 age group with a 48% correct response level and male C1 social group with a 57% success rate. The best female responses were amongst the 35-44 age group (29%) and C1 social group (29%).

Victoria Nye, Director of Training and Education at AUTIF observed:

"The lack of awareness amongst those with children at secondary school is worrying. Thankfully the Government has made education a priority and is reviewing the National Curriculum. Schools may soon have more flexibility and time to teach personal finance."

AUTIF is committed to improving the situation. Through its active involvement in the Personal Finance Education Group (PFEG), it is encouraging the integration of personal finance education into existing subjects in the curriculum.

Victoria Nye, who is a founder member of the PFEG continued:

"The results from this survey strengthen our resolve, but parents too have a vital role to play in equipping their children to make informed decisions about their long term security."

"Parents concerned about their children’s financial awareness should ask schools to include reference to personal finance when developing basic skills such as numeracy, literacy and communication. Also, during the school holidays parents can help their children become canny consumers. Everyday activities, such as shopping, cooking and DIY tasks can all be low-key lessons in personal finance."

For further comment please contact:

Anne McMeehan, Director of Communications AUTIF 0171 831 0898
Victoria Nye, Director of Training & Education AUTIF 0171 831 0898
Susie Poote, Communications Assistant AUTIF 0171 831 0898
Roshan Bailey, Project Manager AUTIF 0171 831 0898

Notes to editors

1. The Personal Finance Education Group is an impartial, non-profit-making organisation which aims to educate all those at school about financial matters so that they are able to make independent and informed decisions about their personal finances and long-term security. The PFEG is a coalition of financial service industry representatives, regulators, consumer representatives, Government officials and educationalists. It is funded by its members and by grants from other organisations which share a belief in the value of the PFEG’s work.
2. The aims of the PFEG can only be achieved by meeting the real and practical needs of teachers, and its work is therefore firmly based on research and consultation.
3. Working with teachers, PFEG has constructed a Learning Framework for Personal Finance. The Learning Framework sets out learning objectives for a structured progression from age 5 to 16, gives example activities for achieving the objectives, and indicates clearly where these fit within the curriculum.
4. In parallel, the PFEG has compiled this Directory which identifies currently available resources to help teachers implement the Learning Framework and a set of Good Practice Guidelines to ensure the resources are educational.
5. PFEG is now actively piloting its approach in 20 primary and secondary schools.
6. FACETS is a cross-population study based on independent data collected by RSL, one of the largest operations working in this area and a leading exponent of computer assisted personal interviewing. This data is then compiled into a practical format for subsequent interrogation across a wide range of socio-demographic splits using MarketMinder. For further details contact Mike Hare - MarketMinder - Tel: 01778 345588
7. Each month a sample of 1000 people is filtered to isolate those responsible for making financial decisions. It is rigorously selected to reflect the balance of the adult population by sex, age, socio-economic group and geographical location. People are interviewed on a face to face basis to ascertain their understanding of basic personal finance matters that are likely to affect them.
8. There are 14 questions asked each month covering a wide range of personal financial topics. They are the same questions and will not change unless circumstances specifically demand it, in which case they will be replaced by a question of similar weight and where a lack of understanding or appreciation will have similar implications for people's financial security. As this is an ongoing survey these are 'live' questions and therefore their precise nature and phraseology is not open to general disclosure, although members of the press may see them on request for their own appreciation and strictly not for publication for fear of interfering with the research.
9. The questions are asked to establish a True, False, Don't know response, thereby establishing a number of measurement tools. The main AUTIF FACETS index is based on knowledge, i.e. those questions that are correctly answered. In addition AUTIF is in a position to measure the level of misunderstanding, i.e. where the answer given is wrong, the level of ignorance where the answer is 'don't know' and if the last two elements are combined to form a composite, the understanding 'gap' can be monitored. Furthermore, this can be carried through to assess understanding on an individual question basis and to measure any improvement that can be isolated to specific segments of the population.
10. It is not anticipated that there will be much volatility in these indices and a three month rolling measurement is being used so as to ensure the sample has maximum relevance. What is sought is the translation of a positive trend over time in the level of understanding by the population at large.