How to speak to young people about money, savings and pensions

How to speak to young people about money, savings and pensions


Talking to your kids about money, and particularly long-term savings models like pensions, is so important, but it’s not always easy.

In this post, we’re bringing you some ideas on how to talk about money, savings and pensions to children from the ages of nine into late teen years*.

Why talking to young people about money is so important

Understanding the different ways that we save, spend, and manage money may be crucial, but it isn’t always straightforward.

Teaching young people about money equips them with the knowledge and skills to manage their money effectively today and when they’re financially independent.

While children do learn about money in school, not everyone has the same curriculum and some kids might miss out.

These conversations, especially when they take place in the home, build confidence and demystify financial matters, such as how pensions work.

How to start a conversation with your child about money and savings

Sometimes it’s hard to find the right time to talk about money. Here are some ideas or situations to look out for to get the ball rolling.

Saving for a big item

Are they interested in buying something significant that will require saving over a long period of time, like a games console or riding lessons? This can be a good opportunity to discuss saving up for it using pocket money, birthday money etc.

An upcoming birthday

For many kids, birthdays might mean receiving money as a gift. Asking whether they’re thinking of saving, spending or something else is a good jumping-off point to talking about money in general.

Getting a mobile phone

For younger teens, getting a mobile phone for the first time is a good opportunity to talk about long term spending. From how much phones cost, to how contracts work versus ‘pay as you go’, to what they plan on doing if they lose it – it’s all good groundwork for future financial chats.

How to explain pensions to children and young people

Once you’ve opened up the topic of money, you might want to start talking about pensions, how they work, and why they can be very valuable.

While we can’t help you describe pensions word for word to a young person, you might find some of the following approaches helpful:

  1. Consider having the young person chat about pensions with someone who knows: a retired person! This could be a grandparent or other trusted older person.
  2. It can be difficult to imagine how money grows over time. Using a compound interest calculator can be a good visualisation tool, and together you could input different figures and ages to demonstrate how saving little and early can be effective.
  3. If you’re talking to a teenager, you could consider sharing your pay slip with them. They can see first hand how much goes out per month to your pension and how much a business can contribute on top of that. This is especially valuable if they’ve begun working a part-time job.

You can also check out our blog post on pensions  for some explanations of different types of pensions and how they work.

Ways to hold a conversation about money

There’s no right or wrong way to talk to children about money, but here are some approaches that might resonate with you.

Asking the child or teenager how they think something works is a great way to open a discussion. For example, if you’re talking about pensions you could start by asking: “How do you think people who are retired can pay for things like food, bills or their home?” Even if their answer isn’t right on the money, focus on what they got close to and open up the topic from there.

It’s not how many of us were raised, but there’s a lot of value in being honest about your own financial experience. If you’ve sometimes struggled to save for something in the past, found financial matters difficult to understand, or felt left out of money discussions when you were younger, consider sharing that with the young person if they’re old enough.

Not every young person will be able, or want, to show an interest in talking about money when you want to. You know them best, and maybe there’ll be other chances to talk later in the future.

The most important thing to remember

There’s no ‘perfect’ way of talking about money and saying anything is better than nothing.

As long as you’re opening up the subject of money and finding ways for a young person to develop their own understanding (at their own pace), they’ve got a much better chance of becoming confident with managing their own finances in the future.

If you have any questions, concerns or thoughts about your own financial future (or that of any young people in your life) you can always discuss any with our team. HWIFM is all about supporting you and your family’s shared financial journey, so don’t hesitate to get in touch 01606 338914.