Blackpool children caught in 'culture of spending' amid deprivation finds study at Grange Park's Boathouse Youth Club

The findings of a study at Grange Park’s Boathouse Youth centre found a ‘culture of spending’ also undermined the youngsters’ potential for planning any financial security.

With Blackpool having the highest national score on credit management services company Lowell’s Financial Vulnerability Index, Boathouse Youth was approached by the Centre for Social Justice (CSJ) – the leading Westminster think-tank behind the Universal Credit welfare system North-West office - after news more than one million people in England are in hock to illegal lenders.

Working with a group of forty Boathouse Youth 13–16-year-old children from some of the most deprived communities in Blackpool, the CSJ and Boathouse Youth ran a series of interviews and exercises to test the children’s financial skills and understanding.

The findings informed a new report by the CSJ, Practice Makes Perfect: Insights from Experiential Financial Education in Blackpool, which reported the majority of the children had heard of basics terms such as budgeting, saving, debit card, credit card and loans – but only a minority of the group could give precise definitions.

More worrying, the reports said, that at least half the children in the group failed to pass basic literacy and numeracy tests, skills which the CSJ describes as the ‘prerequisite to financial literacy’.

The saving habits of the children were flagged as worrying with only 3 in 10 having a bank account, meaning the opportunities for the children to learn how to save were limited.

Notably, a culture of spending among the children was evident. Comments such as “when I get it, I feel like I have to spend it” were common, the reports says. The CSJ found that many of the children focused on what luxury items money can buy, not on what necessity items money pays for and what hardship it prevents.

Speaking to staff from Boathouse Youth, the CSJ was told that part of the problem is due to deprivation and because “being able to manage your money well doesn’t matter much when you have none”.

Yet without good basic numeracy, role models and opportunities to practise with money, staff warned the CSJ that effective financial education is always going to be an uphill struggle.

The investigation follows the CSJ’s recent national report, On the Money, which found 24 million people – around half of adults – report not feeling confident managing their money day to day.

The think-tank recommends that financial education is practised ‘experientially’ – teaching children about money from a young age and giving them opportunities to experience money management in the real world, not just theoretically through the classroom where some pupils complained about finding money classes ‘useless’.

Laurance Hancock, CEO of Boathouse Youth in Blackpool, said: “It isn't everyday a national policy think tank finds you like a needle in a haystack and asks how they can get to know you better.

"The CSJ put in the time to get to know my team and the young people we support day in and day out in Grange Park and their research is stronger as a result. I hope their recommendations generate the change that's needed for important finance principles to be conveyed in more relevant ways to young people across the country in these hard times.”

Matthew Greenwood, CSJ Head of Debt, said: “The consistent theme we've picked up throughout our fantastic time working with Boathouse Youth has been that it is important for children to have direct experience managing money. Experiential learning is key to supporting children remember key financial education lessons that will put them in good stead later on in life"

Paul Maynard, MP for Blackpool North and Cleveleys, said: “As a town with eight out of the ten poorest neighbourhoods in the country, financial precarity is not a new phenomenon in Blackpool even with the current increases in the cost-of-living

“Starting at a young age, it is crucial for young people to learn how to manage money, build up financial resilience, and be equipped to master their own financial affairs.

“The conclusions reached by the Centre for Social Justice are fundamental. Financial education needs to relate to young people’s daily lives and challenges now and not a few years hence, and involve practical learning, rather than just a whiteboard. I congratulate those involved in the project.”

John Pears, UK CEO of Lowell, said: “This report adds to the growing body of evidence that financial education is something we need to do better in this country. Not giving children and young people the skills they need at this early stage holds them back in later life.

“What Boathouse Youth and the CSJ are doing is fantastic. It is showing that we both need more support to young people on financial education but we also need a conversation about how that provision is delivered. Kids need to see and experience money and budgeting outside the classroom.”

Blackpool was chosen for the CSJ investigation as the area of Britain with the highest scoring on Lowell’s Financial Vulnerability Index.

The index is based on six components that capture a household’s ability to manage daily finances and resist economic shocks: carrying defaulted debt, claiming work-related social benefits, holding a high-cost loan, relying heavily on credit, lacking emergency savings, and using alternative financial products.

The full write up can be found in Practice Makes Perfect: Insights from experiential financial education in Blackpool on the CSJ’s website -https://www.centreforsocialjustice.org.uk/.