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Tackling the Big Issue of Poor Financial Capability: Free Online Personal Finance Education

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Martin Upton, Director of the True Potential Centre for the Public Understanding of Finance (True Potential PUFin)

With a recent MAS survey revealing that 16 million people in the UK have less than £100 in savings it is timely to ask what is being done to tackle the national crisis of poor financial capability and its translation into the inadequate management of household finances.

Survey data show that 4 out of 10 adults have limited personal finance skills, that up to 70 per cent of students completing higher education have never had any tuition in financial management and that there is a sharp increase in the numbers of people – including those aged under 25 – who are seeking help to manage their debts.

Sure, personal finance education is now provided in Schools across the UK – with schools in England adding this to their curriculum from last September (elsewhere in the UK personal finance education has been provided since 2008). But this education is only provided up to the age of 16. Crucially no more personal finance guidance is not routinely provided immediately before pupils leave school and move into higher education, apprenticeships and employment.

And of course most adults never benefited from such personal finance education with the consequence that, as an array of statistics and surveys attest, financial capability amongst the population as a whole is poor with resultant bad choices being made about borrowing, pensions and financial planning generally.

At the True Potential Centre for the Public Understanding of Finance (True Potential PUFin) at the Open University Business School these problems are being addressed by providing, free of charge, a series of short courses on personal financial management. The trio of courses – Managing My Money, Managing My Investments and Managing My Financial Journey – are run both on the FutureLearn platform and, continuously, on the Open University’s social learning platform OpenLearn. Managing My Money has also been versioned for radio and is available on Share Radio too.

You can follow the links below to each of these courses.

Managing My Money (MMM) MMM on FutureLearn

MMM on OpenLearn

MMM on Share Radio

Managing My Investments (MMI) MMI on FutureLearn

MMI on OpenLearn

Managing My Financial Journey (MMFJ) MMFJ on FutureLearn

MMFJ will be on OpenLearn by the end of October 2016

The courses comprise a lively mix of videos, audios, animations, quizzes and text to get everyone up the learning curve on personal finance. The FutureLearn versions are facilitated and enable participants to engage with the Open University’s mentors and with their fellow learners. The courses not only cover all aspects of household financial management but also explore the financial services industry and how consumers are provided with protection by the Financial Conduct Authority’s regulatory regime. One feature is the accessibility of these courses which can be downloaded to mobile ‘phones, tablets and other mediums.

The great news is that the courses have not only proved popular – with over 115,000 having registered to study them – and evoked very positive feedback but they have also made a positive impact on financial management. A survey of over 800 people who studied Managing My Money demonstrated a positive impact on financial knowledge and decision-making. The summary findings are set out in the table below.

Table: Managing My Money (MMM) – Findings in relation to behaviour change

% before study of MMM % after study of MMM
Feelings Felt stressed about your financial situation 31.2% 18.0%
Felt confused by a financial product 40.9% 19.0%
Debt Borrowed on a credit card 31.2% 22.8%
Missed payments on a loan, credit card or mortgage 4.9% 1.0%
Spending Set a budget 43.7% 51.7%
Shopped around for a better deal on a financial product 52.8% 59.4%
Savings Put money into a savings account 74.8% 76.0%
Put money into an investment fund 35.6% 32.8%

Source: Online Personal Finance Learning (True Potential PUFin, June2016)

So, yes there is hope that with good (and free) education the issues of poor financial management and the resultant problems this generates can be tackled.

The establishment and activities of the Open University’s True Potential Centre for the Public Understanding of Finance have been made possible thanks to the generous support of True Potential LLP. True Potential has committed to a five-year programme of financial support for the Centre. Views expressed by True Potential PUFin may not reflect those of True Potential LLP.

Professor Sally Dibb and Dr Lindsey Appleyard from CBiS are working with the True Potential PUFin Centre at the Open University on a joint financial capability research project. As well as this guest blog post, we will also be supported by Will Brambley from the Open University during our live #askCBiS Twitter Q&A for #FinCap (16th November), to coincide with the Money Advice Service’s Financial Capability Week.

Originally posted on PUFIN.

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Coventry University

7 thoughts on “Tackling the Big Issue of Poor Financial Capability: Free Online Personal Finance Education

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