How old were you when you learned how mortgages work? How about income tax? Could you, even now, confidently explain compound interest?

For many of us, our financial education left a lot to be desired, leaving us scrabbling around as adults to work these important things out for ourselves.

But Darren Collins decided that this wasn’t going to be the case for his students - so he set about turning them into savers and financial experts who won’t fall for the latest investment scam. He tells us how he did it ...

Tes: How did you recognise that there was a problem with young people’s understanding of personal finance?

Darren Collins: It first occurred to me that there might be a problem when I overheard students talking about some of the content they were coming across online. Students have always been attached to their phones, and the lockdowns have only exacerbated this. But some users on social media are glamorising a world of risky investing.

In particular, on Clubhouse, a new type of influencers (“finfluencers”) are providing unregulated financial advice to young people. They make it look easy and appealing. In some cases the investments are akin to gambling; often they are just scams. Teenagers are getting their heads turned by cryptocurrencies like Dogecoin, and social media-driven stock crazes such as GameStop.

At the other end of the spectrum are those teenagers who don’t think it’s possible to make long-term gains through sensible saving and investing. They close their ears to prudent money management advice that could save them from a life of debt or help give them a comfortable financial future.

Do you think this is happening because students are not being taught enough about personal finance in schools?

Yes. Personal finance was added to the curriculum in 2014, and it pops up in maths and PSHE, but is squeezed between other things. There is no finance GCSE or A level.

The current Ofsted framework also does not give financial education the priority it deserves. The rapid rise in young adults buying risky assets has caught many people off-guard, and traditional education is not able to respond at the same speed because curricula take years to be approved.

You decided that you needed to teach your students more about personal finance. How did you start to do this?

Seven years ago, I was a PE teacher and started teaching finance by chance as a result of helping out in the business department. The school had looked at my CV and knew I had an MBA and asked whether I would be prepared to take over from someone who was leaving.

I now teach personal finance within sixth-form PSHE lessons (where we use Martin Lewis’ Your Money Matters as a guide), in business lessons and within the London Institute of Banking and Finance (LIBF) qualifications. I introduced the latter set of programmes to the school three years ago, after getting the SLT to agree to them.

Now I think this is a subject that needs to be shared with as many students as possible and could make a big difference to their lives.

What are the key areas that you think schools need to cover?

I always start by asking students what they want to do with their lives. Once we’ve figured out their goals, they can begin to plan financially for them. I try to relate what we’re studying - whether it’s mortgages or life insurance - back to their goals. It means they are more likely to engage in the process.

I teach them about the “risk pyramid”: at the bottom are the less risky assets that should form the core of your savings and investments. The risk rises as you go up the pyramid, but the amount you should sensibly invest in these shrinks, too. I tell pupils if they do feel the need to invest in cryptocurrencies or other risky assets, then they can do so at the top, using 1-10 per cent of their overall savings pot.

I also cover compound interest, where the interest you make itself then generates interest. I show how 7 per cent growth a year in a fund that invests in the right stocks can really add up if you invest early.

And we talk a lot about the psychology of money. Living within your means doesn’t resonate with young people who dream of big houses and flash cars. I try to show that if they make sacrifices early and are in control of their money, they can eventually gain independence and control of their life.

What has the response from your students been like?

Students love the topic. In a 15-minute Year 11 assembly titled “Who wants to be a millionaire?”, I outlined how they could all become millionaires by adopting a realistic compound interest strategy. I was given a spontaneous round of applause at the end. Our kids never do that!

Building on this experience, I then delivered an online assembly to the whole school. I roped in six colleagues, three sixth-form students and a best-selling author in finance to help students better understand the benefits of compound interest.

The reaction from families has also been positive. It’s always a great feeling when I hear that some of my students are talking about my classes with their parents or guardians over dinner.

What would make it easier for all schools to deliver this type of education?

I’ve been able to pack these topics into my lesson plans for finance, maths (where we cover compound interest) and PSHE, and being head of Year 12 has allowed me to influence the delivery. But, of course, I want more time to deliver more classes to more students.

We need leadership from the top to make financial education more mainstream. It’s great having charismatic teachers who believe in the importance of personal finance, but you don’t get them in every school.

Heads take their lead from the Ofsted inspection framework, and this trickles down into teaching. The Ofsted framework needs to prioritise personal finance and give it more space in the curriculum.

Finance is one of those rare subjects that has both theoretical rigour and lasting practical benefit.

Darren Collins is a teacher of finance and business at The Sittingbourne School in Kent and a qualified financial adviser. He won the 2020 Interactive Investor Personal Finance Teacher of the Year Award

This article originally appeared in the 4 June 2021 issue under the headline “How I helped students avoid online financial scams”