On 7th January 2013 we published a blog called ‘RedSTART; a financial education charity and entrepreneurship programme‘. It marked the launch of RedSTART Educate, following the successful pilot day on 19th December 2012 with Lister Community School.
Since then, we’ve worked with almost 3,500 students from 51 schools from across the UK and beyond. We have been supported by 13 partner organisations, collaborated with MyBnk and supported the KickStart Money campaign to build a financial education evidence base. We have registered RedSTART as an independent Charity with independent Trustees on the Board, set KPIs for the short, medium and long term and hired Julian Wright as our first dedicated RedSTART employee.
In the initial blog we explained the rationale, in other words; ‘the why’ behind RedSTART. We split this into four sections; Financial Literacy, Entrepreneurship, Responsibility and Conflict. Reflecting on these now, the need for action to deliver financial education remains as strong as ever:
When people are more knowledgeable and confident about their personal financial decisions their own personal wealth will grow, helping them contribute to a booming economy.
– Ben Bernanke, Chairman, Federal Reserve
Recognising the accuracy of Chairman Bernanke’s comments, a number of important developments have occurred in the financial literacy space since December 2012. Following a long run campaign which RedSTART pushed forward alongside MyBnk, Young Money and Money Savings Expert financial education was added to the national curriculum in 2014. Although it was a great victory for financial education campaigners to get financial education included in maths (5-14yr olds) and citizenship (11-16yr olds) the battle is not over. Only half of all schools ‘maintained schools’ follow the national curriculum, for free schools and academies it remains optional. In our experience teachers also need help delivering financial education, having never had any formal training themselves. In response the RedSTART digital team have been creating materials that can be used in the classroom in primary schools #MoneyMatters and secondary schools #Moneyssentials. Expanding our reach to schools that are not within easy range of our offices or the offices of one of our partners. Research has also shown that Money Habits are formed by the age of 7, leading us to focus our strategy on primary school engagement and support. The Money Advice Service launched a £7m initiative to support financial capability projects and evaluate their impact.
With the UK economy teetering on the brink of recession we must encourage and nurture entrepreneurial drive and ambition.
– Robert Gardner, CEO, Redington Ltd
The recent UK budget signals 17 years of lost pay growth and significant uncertainty over Brexit has been the unavoidable political theme since the vote on 23rd June 2016. To make a success of the UK’s departure from the European Union and push through the tough times that lie ahead, the UK will need financial savvy and entrepreneurial people to create the free trading and open for business environment that exits at the end of the Brexitier rainbow.
The shift from Defined Benefit (DB) to Defined Contribution (DC) pension provision represents a paradigm shift in responsibility from the corporate to the individual. The investment understanding and financial knowledge required to successfully manage one’s own pension provision is in integral part of the education of young people. Educating our young people in financial literacy is not a luxury but an imperative.
The trend has continued with the close of more Defined Benefit pensions Schemes to new members and future accrual. The increase in individual responsibility is apparent in other areas with the growth of the student finance burden and retirement freedoms. RedSTART research in this area has been picked up in the national press, highlighting the impact of the interest rate changes as well as the increase in the principle amount of the loan.
A growing number of commentators now foresee growing conflict, and even future political strife, over the entitlements amassed by the retired and retiring baby boomers. Younger citizens are beginning to realise that the current distribution of entitlements is unfair. This is exacerbated by demographics; the UK has an ageing population – generations Y & Z will have to support a significantly larger retired population than the generations that preceded them.
Inter generational fairness was a key issue in the 2017 election result (with the Labour party’s promises to address concerns around student finance and the housing crisis thought to be a key driver behind the shock result. In the recent budget Chancellor Phillip Hammond made clear concessions on the issues, assisting with transport costs (an extension of young people’s railcards to the under 30s) and housing (removal of stamp duty for first time buyers).
Looking through each of these lenses makes it clear that the rationale behind/need for financial education has increased since December 2012. RedSTART is committed to working as part of the wider financial education movement to build a more financially capable population.