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‘Forget national service’ focus on financial literacy

by LLB staff reporter
27th Jun 24 10:54 am

Accountant Grace Hardy, 21, who runs her own business and has a growing following for her financial advice and tax tips online, has called on UK political parties to deliver a programme of better financial education in all schools.

In a Tik Tok video, posted following the latest party leader debate, Hardy says: “If the government want to make national service compulsory, why can’t they do something that would actually be helpful for young people, like National Financial Education?”

Hardy is launching her own Unconventional podcast on Thursday 27 June, UN World Micro-, Small, Medium Enterprises Day, to share the advice of business and finance leaders for the growing number of young people interested in being their own boss, starting a business, or getting on top of their finances. 

The Association of Accounting Technicians (AAT), which represents more than 50,000 accountancy and finance professionals in the UK – including Hardy – shares her concerns and is the official sponsor of the Unconventional podcast. A longstanding advocate for these issues, the AAT’s licenced and qualified members support 840,000 SMEs in the UK with accountancy, finance and tax advice services.

“We’re proud of members like Grace who are passionately putting the case to our country’s leaders for these much-needed policies,” said AAT’s Director of Policy Adam Harper.

In May 2024, a parliamentary committee called financial education “vital” for 16 to 18-year-olds given they are “transitioning into the workplace, paying taxes, considering applying for a student loan, and perhaps living away from home for the first time”.

Yet, neither Labour not the Conservatives have clear plans for practical financial literacy in their 2024 manifestos.

Hardy continues: “Making financial education compulsory in all schools would be so beneficial; it’s currently only mandatory in state schools yet academies and private schools make up 90% of schools.

The next government needs to make this a priority because only half of adults are financially literate. If we want better futures and to be more financially stable, then financial education needs to be taught in schools. Were you ever taught financial education? I wasn’t.”

AAT calls for young business owners national service exemption

Harper said that if, at some stage in the future, National Service were to be reintroduced, AAT would support exemptions for young entrepreneurs, freelancers and business owners. Especially if attendance would be driven by threatening to block essential business lending.

“Young business starters are doing the right thing – they’re already contributing to our society. We need policies that back our young people and their ambition with better financial education and access to capital, not block them.”

Harper cautioned that the unintended impact on freelancers and other small businessowners could be significant. 74 percent of SMEs relied on some form of external finance, official survey data shows. A quarter used bank overdrafts (24%); a fifth hire purchases (22%); and more than 1 in 10 (11%)  used loans from a bank, building society or other financial institution in the running of their business.

Party manifestos variously describe SMEs as the “lifeblood of our economy” and “the lifeblood of communities and high streets across the country”.

But when it came to the real barriers faced by business starters, Harper said there was little evidence of an understanding of challenges, such as access to capital and the impact a lack of financial literacy has on holding back young business starters. He pointed to 25 percent of SMEs relying on credit card debt as a riskier-than-necessary way of financing their business, as one example of where the two issues converge.

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