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Financial education vital to tackling pension crisis

first_imgChanges to the Student Support Scheme for people living in Direct Provision RELATED ARTICLESMORE FROM AUTHOR NewsFinancial education vital to tackling pension crisisBy Staff Reporter – March 1, 2019 958 Ollie Moran, financial advisorTHE lack of financial education being provided at a young age has contributed to Ireland’s pension crisis.That’s according to a leading Limerick financial advisor who believes that a low standard of financial literacy played a part in the 2008 economic crash and could also cause problems in the future.Sign up for the weekly Limerick Post newsletter Sign Up Ollie Moran, owner and founder of Ollie Moran Financial Services, was commenting on figures from the Central Statistics Office, which put Ireland’s pension liabilities at the end of 2015 at €436.3 billion, which is more than double the national debt.“The level of financial literacy is low certainly by international standards. We need to seriously consider the introduction of a domestic finance subject for students at secondary level, something that equips young people with the basic financial skills they will need in adulthood”, he said.Around 65 percent of private sector workers in Ireland have not made any provision for retirement and the Irish government is now proposing to introduce a mandatory pension scheme to address the issue.International studies however show that attitudes about money are formed in children as young as seven years of age and with research by Irish Life showing that one in four Irish savers don’t know either how to invest or what level of return they could expect from investing, isn’t it time that we consider introducing financial education into the national curriculum in Ireland?What can we learn from others?In England, financial education has been on the national curriculum since 2014. At secondary level, topics include budgeting, savings and pensions, insurance, income and expenditure, credit and debt, simple and compound interest, loan repayments and managing risk, and a number of groups are calling for financial education to become compulsory in primary school.Martin Lewis, founder of moneysavingexpert.com, has also developed a personal finance textbook which aims to make it “easier for teachers and schools to teach financial education”.Every state secondary school in England will receive 100 free copies of the book which has been produced by financial education charity Young Money in collaboration with Mr. Lewis.“Companies spend billions on advertising, marketing and teaching staff to sell, yet we don’t get any buyer’s training. That needs to change,” said Mr. Lewis.“The best place to teach is in the classroom — I hope this textbook will help make that easier.”Emphasising the importance of financial education to society, Michael Mercieca, chief executive of Young Money, said: “It’s vital to the personal well-being of individuals and to the country that we improve the education of young people in this area to give them the best possible chance of success in the future.”According to research carried out in 2018 by Amárach Research half of Irish people say their mental health suffered due to the economic recession and hundreds of thousands experienced thoughts of self-harm or suicide. The research showed that seven in ten experienced stress and anxiety, while over a quarter had to seek professional help to cope with the mental struggle.Even as the economy recovers, Irish households continue to be the fourth most indebted in the EU at an average of €29,307 per capita and approximately one third of all Irish third level students are currently experiencing serious financial problems. With financial wellbeing and mental health being so closely related, financial education early in life is crucial.If the Irish government wants to encourage the public to provide more for their own retirement one way that it can do that is by offering incentives.In the UK, residents can open Individual Savings Accounts (ISAs) and invest up to £20,000 per year tax free. ISAs were introduced in the UK in 1999 and were designed to encourage people to save. There were 10.8 million adult ISA accounts subscribed to in 2017-2018 including cash ISAs, lifetime ISAs, stocks and shares ISAs, help-to-buy ISAs and junior ISAs (which parents can set up for their children).By opening an ISA an individual can buy shares, bonds, investment funds or simply hold money in an interest-bearing account – all tax free.Frank Conway, author of Ireland’s Essential Guide to Personal Finance and founder of MoneyWhizz.org, an organisation that works with schools and employers teaching personal financial skills, points to a recent study carried out by Standard and Poor which shows that only 55 per cent of Irish adults are considered to be financially literate (compared to 71 percent in Norway, Sweden and Denmark, 67 percent in the UK and 66 per cent in Germany).“Although awareness is improving there is much more that can be done. We need to provide people with the basic financial skills that are needed throughout life.There is a tremendous amount of interest in the services we provide from both primary and secondary schools as well as well as Irish companies helping their employees develop these skills, but it is critical that financial education is fully integrated into the national curriculum, at both primary and secondary level.”Ireland is facing a massive pension shortfall and urgent action needs to be taken.People are living longer, the financial landscape is becoming more crowded and complicated and individuals are being asked to provide more for their own financial security in retirement at a time when interest rates are at an all-time low.If this is to become a reality, the Irish government needs to urgently introduce financial education into schools and introduce incentives for adults already in employment.by Rian Mac GiobúinEireannachtharlear.com Education and Training Board serves up award winning standards Linkedin Twitter Limerick social entrepreneurs honoured for their work in response to covid-19 Advertisement Printcenter_img Limerick schools urged to get involved in STEM challenge Email Students in Limerick colleges to benefit from more than €1.5M funding to assist with online learning Facebook TAGSeducationEireannachtharlear.comFinancialRian Mac Giobúin Previous articleIrish Metal event of 2019 set for King John’s CastleNext articleNew political party to launch in Limerick Staff Reporterhttp://www.limerickpost.ie WhatsApp Consultation process on a new action plan for apprenticeship launchedlast_img

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