Far too many teens head off to universities of questionable calibre, youngsters would be better off learning a trade
PUBLISHED: 12:47 29 August 2017
The second half of August is a time when exam results traditionally dominate the news. Pictures of screaming, high-fiving sixth-formers were everywhere following publication of A-level results, and a slightly younger group were similarly ecstatic/tearful a week later when GCSE results were released.
The flimsiness of lists prepared by schools, detailing exam outcomes in readiness for collection by anxious youngsters over a week in August, betrays their lifelong importance.
For most, the information contained on these tiny pieces of paper is truly life-changing and will determine their immediate futures, at least until the next educational qualification, usually a university degree, is attained.
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Society’s apparent willingness to offer youngsters of all abilities a reasonably fair crack of the educational whip has been hailed as one of the most significant changes to have taken place across the UK over the past half century, but is this correct?
It might be unfashionable to say so, but far too many people head off to universities of questionable calibre, where they study courses of little or no relevance to the real world, rack up eye-watering levels of debt and unwittingly keep unemployment levels artificially depressed.
MORE: What’s the point of saving money if you don’t put it to good use?
In many cases, youngsters would be better off learning a trade or becoming an apprentice at 16 or 18; either that or simply getting a job and saving to go travelling, buy a car, or establish their own business at a later date. But university has become the default option, akin in many folk’s eyes to progressing seamlessly from school year nine to year ten, but this seemingly innocuous step comes at an enormous cost, the detail of which tends to be ignored.
One of the reasons for this apparent disregard of burgeoning debt levels became clearer following Thursday’s A-level results when Investment 2020 published research into British youth’s collective attitudes towards personal finance.
The organisation commissioned a survey of 1,500 young people aged between 16 and 24 which found that more than two-thirds (68%) of school-leavers confirmed they learnt “very little or nothing at school about personal finance and financial services”. Only one in 10 actually studied the subjects at school, with just 3% saying they learnt “a lot” about both topics.
Not surprisingly, the survey found that considerably more than half (60%) of youngsters said their most common source of personal finance knowledge was family and friends.
The report’s findings make for depressing reading for those of us who have advocated the inclusion of personal finance in the school curriculum for years. Indeed, considering some of the nonsense that is taught in school nowadays, failing to educate youngsters about money and basic budgeting verges on educational negligence.
Gone are the days when university tuition was provided free of charge, usually with a maintenance grant thrown in. Such state largesse was affordable when only 2% of the population went to university; once that figure started heading towards 50%, it became unsustainable, yet young people are encouraged to dive straight in to further education unaware of how much it’s costing. In many respects, it’s like sending a learner driver around the M25 without any tuition.
But what’s to be done?
I would suggest that a large proportion of people should give serious thought to how they might benefit from going to university. If they then decide it’s something they want to do, why not take a year or two off and save at least part of the tuition costs? Alternatively, it’s worth considering company sponsorship; some organisations will pay 50% or more of tuition costs if a youngster commits to working for them during vacations.
We also need, as a matter of urgency, to educate our young people about what might be called the “nasty side” of money and our obligations to creditors who rarely go away, however much we would like them to.
Personal finance is not all about ISAs, SIPPs, investment trusts and equities; before we can start tackling such matters, the basics need first to be in place.
If society is prepared to burden those joyous individuals we saw celebrating last Thursday with up to £70,000 of debt simply for going to university, we also have a responsibility to educate them about managing that debt first.
THE WEEK IN NUMBERS
The cost per minute charged to passengers if an Uber driver is kept waiting for more than two minutes. In addition to announcing the charge, the under-fire company has also usefully added a tips button to its app.
Estimated percentage of the world’s 3.2 billion internet users who admit to using emojis. Researchers at one university warned that people who use them in correspondence at work risk “decreasing perceptions of competence,” which translates to “their usage makes you look thick”.
Percentage of young people in the East of England who gain their understanding of pensions “through talking to parents and grandparents”. The figure is 10% higher than the UK average according to finance charity Investment2020.
Number of people who spend more than two hours commuting every day. The figure rose by almost one million between 2011 and 2015.
The average amount overcharged by energy companies last year. USwitch found that 1.3 million households were affected. The company said that more than 400,000 energy bills did not match the meter reading.
Number of arrests made last year at British airports and on UK-bound or departing aircraft for alcohol-related offences. The figure has risen by over 50% (from 255) in the space of 12 months.
Money generated by local councils from parking fines, meters and permits in 2016. One council raked in £76 million. Where’s the money going? Who knows. A survey by the Centre for Economics and Business Research concluded that British roads were now worse than those of Ecuador and Namibia.
Peter Sharkey read economics at the University of Bristol. He worked as an accountant on three continents and has been a company director and investor for more than 30 years, building and selling three different companies.