Fortnightly financial five minutes #25 Sarah Marks
Nigel Yeates, Communications and Stakeholder Business Partner, speaks to Sarah Marks, Chief Executive Officer at RedSTART about starting financial education early.
Please can you tell us about your background, RedSTART and your role there?
I grew up in Bristol and moved to London in my late teens to join HM Customs and Excise, initially living in a hostel on Gloucester Road. After a bit of chopping and changing, including a spell in International Relocation, I ended up in the asset management industry where I worked for over 25 years. For the last 16 of those I was Global Head of Client Service at Insight Investment and was based in New York for the last three and a half of those years.
RedSTART began life as a Corporate Social Responsibility project, which was set up by one of the founders of Redington, Rob Gardner, and a couple of his colleagues in 2012 as a reaction to the fact that though the super bright actuaries they saw arriving at their firm knew everything there was to know about managing investment risk and liabilities, they were very poorly informed when it came to managing their own finances.
It made them think that if these students, with all the advantages they had still don’t know how to manage their money, then what is happening to the rest of our young people? So, they set about creating a gamified four hour workshop that could be delivered for children from 8-13 that would start to address the basics of saving, investing, earning, budgeting, risk and reward. It became a registered charity in 2018.
I started working with RedSTART as a volunteer, supporting the workshops, as over 1,000 volunteers do now. Then an opportunity arose to move onto the payroll in 2020 and I became Development Director, which meant I was looking after the fundraising strategy. In August 2021 I was invited to move into the CEO role. The reason that history is relevant is, that by sitting in those various seats I was very clear about the things I wanted to achieve.
Although I could see that we were interacting with a huge number of children and giving them a great experience, and that after the workshops they were clearly able to understand concepts that they couldn't understand before, I was struggling to convince myself that we were really making a long term impact on their spending and saving behaviour. I asked for a month to create a new strategy and that was the Change the Game programme, which is the programme we are now at the end of the first year of delivering.
You are focused on primary school financial education. Why is this age group so important?
The University of Cambridge conducted a piece of research that concluded that children’s habits are formed by the age of seven, and that includes their financial habits. It’s so much harder to change behaviours and relationships that have become embedded by the time the children reach their teens. We talk to the children a lot about their emotional connection with money and how that drives their behaviours. It’s really important not only that they understand how money works and that they know what habits to adopt, but also that they understand themselves, their natural risk appetite and the way certain circumstances might cause them to behave.
How does your programme work?
It’s a very focused programme. I am aiming to shut the charity down by 2030 because we will have provided the evidence that Government says it needs to be convinced that teaching primary school children about how money works has a benefit, not just on their levels of financial literacy, but also on their confidence levels in their future lives.
We only work with primary school children in schools serving communities of greater disadvantage. We see the same children every year from Reception to Y6, usually twice per year and we deliver a ladder of learning and resources as they move through school consisting of both lessons delivered by the teachers, and workshops delivered by RedSTART and supported by corporate volunteers.
Their presence is hugely helpful as it provides touch points with people in the world of work. When we get to the final workshop in Y6 we take the children to a corporate venue and run the workshop there, and we include a tour of the office and discussion about the jobs that exist there, led by questions that the children have provided ahead of the day.
They will often meet people working in the loading bay, reception, canteen, window cleaners, lawyers, digital marketers and as many other roles as we can fit in. The point is to raise their aspirations and make them aware of the jobs that exist inside these buildings that they have probably never thought about before.
We have also developed an app from a proof of concept that we have been running in a school in North London for the last five years. The children earn a RedSTART £ for every day they turn up at school (which helps with attendance) and they can earn extra £s by taking part in quizzes within the app. These are incentivising them to practise their basic maths and allow us to validate their understanding of money related questions. The money they earn goes into a current account and they have access to a savings account which will pay them interest, but they have to move their money across to earn the interest.
In the playground we have installed a shed which is the shop. In the shop there are low ticket items that the children can purchase relatively quickly, like bottles of bubbles, hairgrips, pens and paper, and higher value items that they have to save up for like sports kit, footballs, and cinema tickets.
Alongside this we have commissioned The Policy Institute at King’s College London to conduct a randomised control trial. Half the schools are receiving the full intervention and half are receiving just the Y6 delivery. The children in Y2 and Y3 this year will be tracked until they leave primary school using annual surveys and potentially through to their GCSE exams. We will be starting a new cohort of Reception and Y1 children next year to examine whether the age at which you start delivery makes a significant difference to the outcome. The team at Kings will also have access to the data from the bank app, and the SATS results of the children as they grow up.
You talk about creating evidence that teaching primary school children about money can bring more than just a practical and educational benefit. Can you share more on that?
At the moment, we spend nothing up front on educating children about money, and tens of millions of pounds on the consequences of not teaching them, and we are squandering the potential of millions of children year after year. The Institute of Psychiatrists produced research that concluded that 50% of people in financial difficulty reported having very poor mental health. Getting into unmanageable debt in your late teens starts to immediately limit your options.
You may not be able to consider continuing in education, or be forced to accept a job that is paying a better wage today even though the long term prospects are poor, or you might not be able to consider a job that requires a commute if you can’t afford a car, the train or the bus. All of this can result in young people remaining in households that are not healthy places for them, or even start to determine and influence the nature of future relationships they choose to have. It puts the brakes on social mobility. Teaching young children about how money works creates informed, curious and confident young adults who will engage with the financial marketplace in a way that is healthy and beneficial for them, as well as the product providers.
Now a question we ask most of our guests, on a more personal note, if £10,000 landed in your lap tomorrow, what would you do with it?
I would rent a large house somewhere and invite family and friends to come and stay with me there.
Thanks very much Sarah, it sounds like you have some really interesting projects and trials going on.
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Fortnightly financial five minutes will now be taking a summer break, we will be back with #26 on 20th September 2023.