A press release recently landed in my inbox that immediately caught my eye: kids aged just seven to 14 are becoming increasingly anxious about money.
It feels hard to imagine children at the lower end of that age group being so concerned, but the research from KidsKnowBest certainly backs it up.
Nearly half (46%) of the 1,000 children interviewed said they were worried about money and their future. Even more (55%) revealed their happiness is affected by money, while 38% said it causes them stress.
The statistics are quite startling.
Yet despite these anxieties, the research also shows children have a strong appetite for genuine, real-world financial literacy. Parents remain their main source of advice, according to 88% of respondents, but only 42% actually think their parents are good with money.
When asked how they would prefer to learn, an overwhelming 87% favoured ‘real-life’ lessons over digital sources
Finding reliable guidance is another challenge. Just 45% say it is easy to access good money advice, and only 11% strongly agree. Almost half (47%) have turned to the internet, yet only 41% trust what they find online.
In short, formal education and existing channels are failing to bridge the knowledge gap.
Over half feel schools don’t teach enough about money, while 20% say they don’t learn about it at all. Only 19% feel they’ve learned “a lot” in school.
When asked how they would prefer to learn, an overwhelming 87% favoured ‘real-life’ lessons over digital sources.
Nearly two thirds said they want to learn more from parents, and 47% from schools. By contrast, just 20% want more from social media, and only 14% from influencers.
Children want to learn, but they are being starved of knowledge by an education system that is failing them
All this points to a clear opportunity for advisers. Children want to learn, but they are being starved of knowledge by an education system that is failing them. Advisers could step in, help fill the gap and demonstrate their value in the process.
What’s more, it is apparent that kids want tips and advice from sources they can trust.
The urgency to address this knowledge gap becomes even more apparent in light of the impending Great Wealth Transfer.
According to the Office for National Statistics, £5.5trn will be transferred between generations over the next 20 to 30 years. In the next decade alone, £327bn is expected to move from baby boomers to millennials.
Despite this, Schroders’ 2023 UK Financial Adviser Annual Survey shows 63% of advisers worry about losing assets during the wealth transfer.
Weekend Essay: A little finance goes a long way in the classroom
One in four (26%) admit they lack a clear intergenerational planning strategy. And while 75% agree it is important to build relationships with clients’ children, only 17% have done so. With grandchildren, the figure falls to just 12%.
Given the amount of assets falling to younger people – and their desire to learn more about money – it’s something that needs addressing sooner rather than later.
KidsKnowBest is now urging financial brands, educators and policymakers to respond with practical initiatives tailored to the needs and anxieties of young people.
Joel Silverman, CEO of KidsKnowBest, said: “The carefree childhood many adults will have enjoyed is now a distant memory. Our comprehensive research shows that children can’t be divorced from the anxieties their parents may be feeling in a world of financial insecurity and continuing cost-of-living pressures.
“Yet, critically, this anxiety isn’t shutting them down. Instead, it’s sparking a deep curiosity and a hunger for practical, human-led learning about money.”
How can advisers start these crucial conversations with an age group they are perhaps not used to engaging with?
Silverman describes this thirst for knowledge among youngsters as “a critical opportunity for the UK’s financial sector to step forward”.
He argues that by providing accessible, relevant and practical financial education, the sector can empower this generation, transforming their anxiety into informed agency and building a more financially resilient future.
For advisers, it could be a double win – helping children understand the value of financial advice, while also reaching the clients of tomorrow.
But how can they start these crucial conversations with an age group they are perhaps not used to engaging with?
Paul Niven, fund manager of F&C Investment Trust, has a few practical tips.
“When speaking with young people about investing, I emphasise the incredible power of compound growth, what Albert Einstein described as ‘the eighth wonder of the world’.
“I explain how a £100 investment into F&C Investment Trust has grown to around £24m over the period since its launch in 1868, dramatically outpacing inflation, which would have only grown to about £15,000.”
As The Who once sang: The Kids are Alright. Perhaps it’s time advisers started talking to them a little more
Niven says that in his experience he has found that connecting investing to long-term life planning is often what resonates with young people.
“I discuss how today’s children may live remarkably long lives, potentially becoming ‘centenarians,’ with one in five girls and one in eight boys born today expected to reach 100 years old,” he adds.
“This longevity means they’ll need to fund potentially 30-plus years of retirement, making early investing crucial for creating future financial choices.”
As The Who once famously sang: The Kids are Alright. Perhaps it’s time advisers started talking to them a little more.
Who knows, as well as reaching clients of the future, they might just raise awareness of the profession and encourage more people into financial advice in the process too.
