NatWest and SBT came together for the last time in 2016 for a roundtable on Education and Finance, aiming to highlight the problematic situations that young people, entrepreneurs and business people alike struggle with: managing finances. We ask the key question, when is it the right time to educate young people about managing their finances? Is it ever too early? And most importantly, what is currently being taught to the future businessmen and women in the UK?
- Rachel Carter, Head of Skills and Employment, Brighton & Hove Council
- Stephen Ashley, Specialist Advice Director, Coutts
- Brett Griffin, Entrepreneur & Founder of Pupil Progress Ltd and Entrepreneurial Spark ‘Chiclet’
- Alistair Barron, Director, Big Futures Show
- Caroline Edwards, Senior MoneySense Manager, NatWest
Jason Dempsey (Chair): Hello everyone, thank you for coming along today. This is the 5th Roundtable we are holding with Sussex Business Times this year; so far we’ve covered entrepreneurship, infrastructure, professional services and revitalising some of our coastal towns, so I’m very grateful to Sussex Business Times for taking part. Thank you to all of the schools taking part and to our panelists, who I will now hand over to introduce themselves as well as to answer a brief question which is simply, what is the most valuable piece of financial education you learned at school, or what do you wish you had learned?
Rachel Carter: Hello everybody, I am Head of Skills and Employment at Brighton and Hove City Council. We have a City Skills Plan and I am responsible for overseeing that, but at the same time I also work very closely with the schools in the local authority. This debate today is an opportunity for schools to come along and engage, and I work very closely with thepost-16 area. The thing that I think would be useful – and I have a 19-year-old daughter so I know she would benefit from this as well – is the understanding about income tax. I think there’s something about understanding about money and where it goes once it’staken from you. I can remember my daughter when she was doing her job, she suddenly came home and said, “why have they taken money?”
Alistair Barron: I’m Alistair Barron, I’m Director of Eastbourne Education Business Partnership, which is a charity. We come from a history of Education Business Partnerships; there are very few left in the country. We are one of the few independent ones and we cover most of East Sussex. We put on events between businesses and schools so, facilitating things like Eastbourne Youth Radio, which is a live radio show for 3 days, with businesses and schools working together. The Big Futures Show is an event that we ran last year and that we intend to run every year. It’s modeled on the idea of the National Skills Show, a skills and employability event – something that students in the regions don’t get to do. I hate to use the word “careers” but careers fairs tend to be more school oriented rather than a good spread of exhibitors and a good experience, so that’s where the Big Futures Show comes in. I think one of the most important things you come out of education with – whether in school orhigher education or whatever – is some comprehension of where your income streams might come from. Once upon a time everybody went out to school, college or whatever and walked into a job; that’s not necessarily going to be the case in the future, it might be that you have more than one job, and it’s how to balance those. It will be things like, if I have more than one job what will happen to my tax situation, my national insurance situation, my pension and on, because I might be doing more than one thing?
Stephen Ashley: I’m a Chartered Financial Planner and what that means is that I deal with our clients in technical areas of financial advice, largely around estate planning and retirement provision. I left school 32 years agoand back then, the first piece of financial education I got was when I turned up to work in a bank; there really wasn’t any. And I feel that young people – whether in sixth form or at university, or even years before that at primary school – should get an understanding of money and what it can do for you. For me, joining a bank in the 1980s, there was a very strict regime for us young bank Clarks; overdrafts were strictly prohibited and if you wanted a credit card or a loan, you went on bended knee and you were scrutinised closely as to whether they would let you have one. What it did was discipline on how to use money, and one of my concerns nowadays is just how freely credit is available. I don’t actually like the word ‘credit’; I’d rather say ‘debt’ because that’s ultimately what it is. So for me, it’s understanding how credit or debt can be used wisely and how to avoid the pitfalls of taking on too much credit too soon, maybe containing some of the opportunities that are there for all of you.
Caroline Edwards: Good evening everybody and thanks for coming. I am in the bank’s Sustainability team and look after our flagship programme, whichis called MoneySense. It’s our flagship programme where we believe passionately that young people should learn about money in school, so it’s a free programme that is available to all schools and teachers, helping young people from the age of 5 up 18 to learn how to manage money and to address the things like, what is income tax? What is credit and debt? What are the responsibilities of having a credit card? When is debt a good thing? I have a mortgage so sometimes debt isn’t always bad, you just need to know how to manage it well. So that’s our MoneySense programme. I suppose the one thing I wish I’d had at school is financial education; we literally had absolutely nothing in school. I finished school a very long time ago, so the world was far less complex and complicated. Young people couldn’t get credit cards easily, we didn’t have internet shopping so you couldn’t buy anything with a touch of your phone, dare I say we didn’t even have mobile phones! The world is much more complex now and many more decisions are in your hand. When I finished school everything was in the hands of my parents – my parents gave me an allowance, my parents deemed what I could and couldn’t spend my money on. Your world is exciting, your world is challenging and we want to make sure you’re equipped to take on those responsibilities and challenges.
Brett Griffin: My name is Brett Griffin. I was a teacher for 10 years. I got myself up to an Assistant Principal level in Central London, I was Director of Sport and in charge of health and wellbeing for the school provision, and then – although not planned – created a system that would help teachers do their job more efficiently and save them time and a little bit of stress. That demand created a business. The system is used now by, close to 285 schools and about 80 now are already paying. I’m now part of what is called the Entrepreneurial Spark programme, based here in Brighton, to help my business get funding and grow to hopefully become a business that’s worth a lot of money. To be perfectly honest, a big passion of mine, and also why it’s grown organically, is the fact that teachers are struggling with the workload, so it’s the perfect time to actually help support what is quite a stressful industry right now. I suppose in answer to the question, the biggest thing for me is learning how to manage money. When I was younger I was very fortunate and had parents who actually taught me the value of money. There was a massive credit card boom when I was around 17 or 18, and all my friends were going out getting credit card and credit cards that you can get on 0% and transfer from your £2000 overdraft to another one. Six or 7 of my friends thought it was just free money; going out and buying trainers and shoes and when I spoke to my dad about it, he was very much saying, “don’t do that”, and they had to pay it all back, which set them back quite a long time because they didn’t really have the value for money. My concern in education is, are we teaching children the value of money?
Brett: I think for me it’s how broad your learning has to be and, again, it’s actually a lot to do with problem solving in your aptitude rather than your knowledge and your ability to retain information. You have to adopt such different social skills, knowledge bases, and actually coming to an answer based on all this information is the key skill that you really need. When I was at school there was a lot of skills based on how much information you can retain; I will teach you this; you can then go and regurgitate that into an examination process; and there is your grade. What are we doing as an education system in this country that’s actually teaching young people how to problem solve and actually be in a position where they can take lots of different bits of information and come up with the right solution? That’s probably one of the things I was lacking when I was at school; did I do enough in school that’s actually going to help me problem solve and put myself in a position where it’s not necessarily what I know, it’s my ability to carve my outcome.
Jason: Steve, you work with some of the region’s most successful entrepreneurs through their career and after their career. Doesthat line up to the feedback you get from them?
Stephen: Very much so. In terms of the client base I deal with I would estimate probably 80% of them are entrepreneurs or have been; they’ve made their business and sold them on, and are enjoying the benefits of that. Also, I find with entrepreneurs very often that the term ‘retirement’ is something that doesn’t actually cross their minds. They’ve got this certain spark within their make up that drives them and you’ll look at every turn for the next opportunity that’s coming along. Problem solving, having an analytical nature, wanting to look beyond the obvious to find a solution. Also, Brett one of the things you said that I picked up on is the education process of learning things to put on a paper to get a grade; some of the best entrepreneurs didn’t do very well at that. They’ve got different skills and different things they can bring to the table. You don’t need to have a good degree from the best university to have a successful life. What you do need, in my opinion, to be successful in running a business is a heck of a lot of energy and you need to be brave. I personally rolled up at 18 and joined a bank, and on the 18th of every month ever since someone has very nicely put some money in my bank account – that’s nice and steady, 9-5, and it works for me. Being an entrepreneur doesn’t work for everyone, but those who are need to be prepared to take some gambles in life, not reckless ones; measured ones. Also, don’t be afraid to ask and develop sharp elbows if you’re looking to set up a business. Go out there, talk to people. If you know a neighbour, if you know a family member or someone with a successful business in your field, go and make a nuisance of yourself and talk to people to find out what they’ve done right. As important, find out what they did wrong and learn from it. I completely agree with the things that Brett said, particularly around having that enquiring mind, that desire and willingness to solve problems. The top thing I’ve put though, is enjoy and feel passionate about what you do. Your working life is a heck of a long time, so you’ve got to do something you enjoy and feel passionate about because if not, then that’s a very difficult place to start from.
Rachel: What I’d say on that as well Steve is that people have more than one career. Years ago peopleused to go into a profession and stay in that profession. I think if you ask most people in this room they have had more than 1 career, but I’ve worked in different organisations – for 20 years I worked in the BBC in lots of different roles, I’ve been freelance for 10 years and I’ve been doing this role in the council for a year. Decisions you make now don’t have to stay with you forever. There’s lots of different options.
Stephen: I think that’s very much evident from the blend of personalities that we have in the Entrepreneurial Spark building here – it isn’t just people fresh out of college or school or university setting up businesses, it’s people of all ages who take a different path from different directions and really evolve.
Brett: I’ve come to the conclusion that it will find you. I know that sounds like a weird thing to say but actually I don’t think you can hide from it. If you’ve got that passion – whether it is to solve problems within your industry, or solve problems with efficiency – it will come out in some way or another. I found that I was creating systems in schools that were helping people dotheir jobs better over 5 of 6 years, but I never actually realised that one of them was going to turn into a business. And just because it’s not a business doesn’t mean that it’s not entrepreneurial thinking.
Brett: The advice that I would give the students in the room is that the one thing I was most proud about was that I was in a position to make that jump. I was in a position where I had been very shroud with my money in my younger years: I’d bought two properties; for about 7 years I didn’t buy anything I wanted, I only bought things I needed, which enabled me to buy another property. So when it came to a place where I had a good idea and wanted to move that idea forward, I could because I had made good investments in property. I’d invested in myself with my masters degree and I worked hard with my career. It put me in a position where I was actually financially able to take that massive pay cut to start on something that I was really passionate about. The discussions we have on a daily basis is, ‘well is it aproduct that’s up and running or is it just an idea?’ If it’s not up and running as an idea then you’re going to have to do a very good job of convincing investors to give you money to make that idea a reality. It cost my website £7000 to get up and running. That was a riskthat I believed was worth taking because I believed that, at worst, I was going to get at least £5000 back or at least £7000 back, so in my head that was my gamble. Some people aren’t in that position where they have saved enough money or they have put enough money behind them to say ‘let’s do it’. So you have to be very careful that you don’t have some wonderful ideas but physically cant’ do anything about it.
Alistair: I think one of the things that’s important to remember is that a lot of entrepreneurship isn’t grown out of ‘I’m going to be an entrepreneur’, a lot of it is by accident. Spending your life in one job is not something that happens to people nowadays; people do move from one career to another and sometimes a change of career happens suddenly, downsizing, redundancy – call it what you like – and you find yourself thinking ‘what am I going to do now?’ Now you might have had an idea kicking around, and I’ve been in exactly that boat; we had an idea kicking around for years that we didn’t do anything about because we were all in comfortable jobs. One day we suddenly had to do something else and we turned that idea into what was then a very successful business. It wasn’t something we set out to do, it just happened. It’s the ability to be adaptable, to know where to go and knock on doors. You may or may not have money behind you – if you’ve worked for a company for 20 years then you might come out with a few pounds in your pocket but you’ve still got to survive and so on. Entrepreneurship isn’t something that I go out and do. For probably the vast majority of people you would call entrepreneurs, it’s something that is voiced upon them by circumstance and then they run with it.
Brett: For example, Levi Roots didn’t set out one day to turn around and say, ‘I’m going to be worth hundreds of millions of pounds’, it just genuinely annoyed him as someone walking round the supermarket that didn’t have his culture on the shelf with a Jamaican sauce, and it links back to this whole idea that it will find you. This system I created for education and for teachers found me because it was too much to them ignore. That comes from following your passions.
Caroline: I also wonder sometimes what you’re taught in school is perhaps what we could call hard skills, so you might be taught the practical things about what a business plan looks like, this is how you do crowd funding, this is how you pull together a balance sheet. You might get that level of input but what I think – and Brett’s touched on it a lot as well – is on what we then call the soft skills. It’s about that adaptability to problem solving, it’s about being resilient. I think something that’s very important in any walk of life, particularly for an entrepreneur, is the ability to fail. With so many entrepreneurs, if you speak to them, you’ll find that it’s not their first venture that is successful. Being prepared to fail, saying ‘yes I failed and I feel miserable about it but where do I go now and what have I learned about it?’, helps. Sometimes in understanding about entrepreneurship or working in business, it’s what we would call an amalgamation of the hard skills, the practical stuff you need to learn, and those soft skills – how you’re adaptable, how you start to develop yourself to be able to rise to those challenges.
Alistair: The Eastbourne Education Business Partnership facilitates a few things like that – we’ve done a few things in schools around a retail business or a young entrepreneurs challenge and things like that, where we go in with businesses and groups of students from years 7 and 8 and upwards to do a morning of workshop stuff like that and bring some people together and that always works quite well as an introduction.
Caroline: I know for the programme that we provide to schools, which is MoneySense, we follow the Personal Finance Education Group, which is an independent charity, and they have worked with each of the departments of education and they have got a framework for what should be on the curriculum. For secondary schools now, financial education is on the curriculum; it’s a requirement for schools to deliver it. It’s not tested but it is there, and for primary schools it’s not yet on the curriculum. There is a framework that’s been agreed for the Department of Education that outlines what should be covered. I’m not 100% sure whether ethics is actually on the curriculum – it is slightly more geared towards some of the practicalities, but that’s a really good point. We were having a conversation earlier about needs and wants, and there is a whole module for the 5-8 age group looking at what our needs and wants are and understanding value for money as well; 2 for the price of 1 is not necessarily good value for money if you can’t actually afford 2 of the items, for example. So I think there is definitely a place for that in education.
Brett: We had an interesting scenario at my old school in Central London where the pupils were incredibly entrepreneurial by buying frozen Lucozades, and they would come in and sell them at £1.25 because they would be able to get them at close to 40p a Lucozade. Now that created territories; who are you buying off under the arches? If you’re buying those on the playground then there’s only one person you’re supposed to be buying them from, so it became almost like a gang replicating the drug culture. We had to have a real roll out across the school of, ‘this is causing problems with friendship, with social and cultural differences’ because there were lots of ethnicity questions with regards to who was buying and selling to, and it raised a real issue within our school about all of this being caused by money. One child was making about £87 a week in cash! So it is something that I believe is very important within schools. It also links back to this whole idea of a question for the teachers; with regard to your delivery of curriculum, how much freedom do you feel you have to actually build problem solving capability and resilience, and a real good set amount of time to actually do that?
Brett: The Principal of Brighton Aldridge, Dylan, used to be my Line Manager, Vice Principal at the City of London Academy and you are very lucky because if you’ve got Head Teacher and you’ve got a multi academy trust that believes in that level of developing those skills we’ve been discussing. I found that I was quite suffocated in that I could see the skills that the children I was teaching needed to have but really, was constrained by the curriculum that I was almost forced to deliver. It wasn’t even the Head Teacher’s fault, it was more really Ofsted wanting to know what an outstanding lesson looks like. What I found as a teacher was the fundamental skills that we’re told we need to teach actually aren’t necessarily the right ones. I really think financial education needs to start very early and obviously you need to have advice at 18. Controversially amongst some of my family and friends, I my daughter is 10 years old and she has a debit card. What I’m trying to do is educate her as to what money is worth and what goes on that card. A lot of people have told me that giving a 10 year old a card is ridiculous and that it’s teaching her all the wrong ways of how to spend money, but I think we need to look at educating at a primary school level, even if it’s the most fundamental skills about budgeting and the emotional attachment to money. I think it’s working out well. It does need to start at a really early age because you then run the risk of getting to a very strong-headed 18 year old who believes they know best. To actually reduce that risk I think it needs to start a lot earlier.
Caroline: To give you a level of comfort that you’re doing the right thing, Brett, Cambridge University did some research and young people’s money habits are set by the age of 7. So if anyone says to you ‘you’re starting too young’ and you start at 10 then if anything, according to Cambridge, you’re starting too late. Young people learn by observing their parents, by observing the world around them and by what they hear and see, and they’ve already formed an opinion of money and an understanding of how money works by the age of 7. So hence, MoneySense starts at 5 and there’s absolutely fundamental things about value, needs, wants, attachment etc. There’s often the debate of who is responsible for teaching young people about money – should it be the parents at home or should there be education in schools? When we surveyed young people what they’ve said to us is they would like to get this information from home too, but what they quite like from school is getting the same information. We all know that I might get some information from my parents and you from yours, but it is different. So actually, what’s the right thing and what’s the minimum standard? I think it should be both but I would encourage you to have conversations at home.
Stephen: I remember my very first paycheck. It was £319 for a month’s work, which probably shows more about my age than the value of money, but to me I was rich! I’d worked and earned money but that was to last me a month and 2 weeks in it had gone. My daughter went to university and that was something we worked very closely with her. She didn’t like it at all but we got her student loans to spread out throughout. With Brett’s comment about his daughter, you really can’t start young enough, and it’s a responsibility with us as parents as well.
Brett: One of my first loans at university went very quick, and I rang Dad and said, ‘Im here and I’m starving’ and he said, ‘well it’s going to be a very long month then, isn’t it?’ And basically the phone went down. It goes back to personal experience; the next time I then got my loan I had to seriously think about what I was going to spend my money on because I was having to ask for help from a lot of friends and all I really got was baked beans. I’m sure my family would have loved to have given me some money but there’s times for some tough love and there’s times to actually learn how to budget your money because money doesn’t grow on trees and that’s the reality.
Thank you to all those who attended this and all previous roundtable events. This was a great topic to end 2016 with and we hope to bring you more topics in the New Year.