Financial Education in New National Curriculum?

Financial education is back on the political agenda as Labour MP Thomas Docherty introduced a private member’s bill in the Commons calling for financial literacy to be included in the national curriculum. pfeg (the Personal Finance Education Group) who are the UK’s leading financial education charity and have been campaigning on the subject for 12 years welcome the bill and the opportunity to further the policy debate.

The bill follows the e-petition launched by Martin Lewis of moneysavingexpert.com calling for compulsory financial education in schools. The petition was one of the first to achieve 100,000 signatures and was debated in the House in December 2012.

pfeg are in complete agreement with Mr. Docherty that financial education ‘should be part of the provision of the national curriculum’. This recommendation was also made by the All Party Parliamentary Group on Financial Education, for which pfeg provides the secretariat, in the Financial Education and the Curriculum report released in December 2012.

Mr. Docherty went on to recommend starting financial education with students aged between 14 – 16 years old. pfeg advocates that financial education should be available to all children and young people aged between 4 – 19 years. This recommendation is in line with the recent Impact Review of Financial Education for Young People conducted by the Money Advice Service, which confirmed that attitudes to money are formed early. pfeg believes that financial education should begin as early on in a young person’s school career as possible and should continue in progressive way year on year.

This is a view strongly supported by Daniel Britton, author of The Financial Fairy Tales which help create positive values and money references from an early age.

Mark Fiander, the Strategy and Innovation Director, at the Money Advice Service said:

“We want everyone to be financially capable. Equipping young people with money skills for life is a key foundation for achieving this goal and we believe an essential building block is the provision of financial education in schools. This is why the Money Advice Service fully supports the work of the APPG on Financial Education for Young People on developing sustainable model for educating future generations. The introduction of Mr. Docherty’s bill – calling for financial literacy to be included in the national curriculum – is a step towards getting this issue back on the agenda. We look forward to the debate early next year”.

The second reading of the bill is due in January 2013. A review in to the national curriculum is currently in progress. pfeg would recommend that discussions on the inclusion of financial education in the curriculum are advanced as soon as possible to guarantee consideration from the Department of Education.

pfeg are firmly of the belief that financial education provision in schools is the most sustainable and ‘catch all’ solution to providing young people with the knowledge and skills they will need to manage their money, make key financial decisions and develop in to responsible consumers on leaving school.

Financial Education Compulsory For Schools?

UK Government to consider making financial education a compulsory part of the school curriculum.

Earlier this week, the All Party Parliamentary Group (APPG) on Financial Education for Young People, which has the support of 226 MPs and Peers, issued a report calling for compulsory money lessons.

Pictured is Daniel Britton from The Financial Fairy Tales with Martin Lewis and Carol Vorderman at the House of Commons Launch. Daniel contributed evidence to the enquiry based upon his extensive experience with financial education from primary schools to young adults.

One of the main recommendations is teaching split between maths and Personal, Social, Health and Economic (PSHE) studies.

Government pledge

Nick Gibb, Minister for Schools, said: “I think we’re all in agreement about the importance of good quality financial education. It is true that young people are growing up in a materialistic world that they are not prepared for.”

Gibb added the Government said the APPG report’s proposals will be included in a review of the national curriculum.

He also confirmed PSHE won’t be compulsory in the curriculum but it is possible for elements of it to be compulsory, of which financial education could be one part.

Earlier today, Shadow Chancellor Ed Balls, writing for MoneySavingExpert.com, said young people must be taught about money matters.

There was also much consensus in the debate that including financial education as part of maths could make maths a more attractive subject a move championed by TV’s Carol Vorderman

Conservative MP Justin Tomlinson, chairman of the APPG, led the calls for financial education to be made compulsory, and to be taught at both primary and secondary schools.

Tomlinson said the next generation needs to be equipped with the key skills to understand issues such as how to compare energy tariffs and how to calculate APR and interest rates.

He said: “We have a duty to equip people to make informed decisions, so they can understand the implications of what they are doing based on their own circumstances.”

Widespread support

Conservative MP Andrew Percy, chairman of the APPG inquiry, said at the debate: “This is about real maths skills, about using real life experiences to support the drive for ensuring our young people enter this complex financial world in a position to make better decisions.”

Labour MP Jenny Chapman said: “An investment in knowledge always pays the best interest.”

Martin Lewis, MoneySavingExpert.com creator, says: “In many ways, this was Parliamentary discussion at its best. Of the members who were there, many noted the importance of the e-petition and the number of constituents who contacted them who said it was important.

“This is by no means the end of the battle but it is a firm foundation that slaps the campaign into ministers’ faces and leaves them in no uncertain terms that unless this is taken seriously, not just the signatories of the petition, but many MPs, will be on their backs.”

Download the full report from the pfeg website here

Compulsory financial education in schools

Over 100,000 people have now signed the petition calling for compulsory financial education in schools, which means it must be considered for a Parliamentary debate.

The petition championed by Martin Lewis at Money Saving Expert hit the magic 100,000 number last night, showing the enormous nationwide support for the campaign to help rid the nation of financial illiteracy, which can lead to serious debt problems.

(click here to sign the e-petition on the Government’s website).

This is the trigger by which all issues raised in Government e-petitions are considered for debate in the House of Commons .

As Conservative MP Justin Tomlinson has agreed to sponsor the petition, it stands a good chance of a Commons airing.

The issue is already on the political radar as over 250 MPs are part of the All Party Parliamentary Group (APPG) on Financial Education for Young People, which also calls for compulsory money lessons.

The petition also has the support of numerous consumer groups such as Which? and the Consumer Credit Counselling Service plus of course The Financial Fairy Tales.

Martin Lewis, MoneySavingExpert.com creator, says: “Thanks to everyone who’s signed the petition and played their part in putting this on the political agenda.

“Politicians of every party should hang their heads in shame. It’s a national disgrace: in the 20 years since student loans came in, we’ve educated our youth into debt when they go to university, but never about debt.”

“We’re a financially illiterate nation, with millions caught by mis-selling, over-borrowing and being ripped off. The easiest, cheapest and most important fix is to get financial education in every school.

Many wonderfully already do this, yet most don’t. The problem is unless it is compulsory, head teachers can’t focus resources to make it happen. Hopefully, this petition will be a major step to change that.”

Debate moves closer

Tomlinson, who set up the APPG, says it is vital we educate the next generation about personal finance.

He says: “I am delighted financial education is supported by so many people, and passing the 100,000 barrier on the e-petitions system is a real, major boost to our campaign.

“We are shortly set to conclude our nine-month inquiry looking at how we can deliver compulsory financial education as part of the national curriculum.

“The 100,000 signatures to the e-petition will help us secure Parliamentary time on this subject, essential for raising the profile of our report with key ministerial decision makers.”

Financial education was due to become part of the curriculum underthe previous Labour Government when then School’s Minister Ed Balls, along with Martin Lewis, launched the proposals in January 2010.

However, as those plans were tied in with sex education, they were scrapped because of the row over teaching sex to kids ahead of last year’s General Election.

 

Financial Education in Schools Debate

Should financial education classes be compulsory in schools in England and Wales?

The video below shows a hotly contested debate about the role and place for financial literacy classes in schools.

Just who should be teaching children about money?

Why isn’t Financial Education Taught in Schools

If ever there was a time for better financial education then surely it is now? When you look at the state of many of the economies around the world it’s a mystery why financial education is not compulsory schools. It is easy to blame banks, big business or governments for the current climate but it is the education of individuals that need to change.

This article looks at some of the arguments for and against mandatory financial education.

Why isn't Financial Education Taught in Schools imageAt school, we may have learned some skills necessary to get a job, but nobody tells us how to create or manage our wealth. If we cannot educate ourselves on ways to obtain and retain our money, we are headed for a future financial disaster.

In the USA, individual debt is growing 23 times faster than the economy. It is a similar situation in many other developed nations, for example the credit card debt in the UK is over £220bn or an average of £3175 per person. Thousands of college graduates who have invested in their education are facing a student loan crisis. The job market is shrinking, and the sour economy is preventing employers, parents and relatives from helping those who are behind on payments,” USA Today reports. “Student loan defaults are at their highest rate since 1998, and likely will go higher” People are even losing their homes and have no money to retire on. It is estimated that the average person today will require $ 1.5 million by 65 years of age to retire comfortably.

Some argue that a better way to teach children about money is in the home, which may have its merits but may create something of a vicious circle: when parents are financially illiterate — they’re not likely to teach their kids very well, are they? Which means that the minority of people, who are smart about money, will (potentially), raise kids who are also smart, while for the rest the cycle will continue.

Another argument put forward against financial education in schools, centres on the twin pillars of lack of time and lack of money. School curricula are already crowded places and a significant financial education programme would have to come at the expense of something already in place. Few teachers would have the necessary competence and confidence to deliver such programmes without the need for additional training and resourcing.

These arguments may be countered by providing financial education online or via other media accessible to students, and indeed their parents, 24/7. Young people will spend hours studying independently for subjects with a real personal interest, playing an instrument, making a social media page or learning to drive for example.
Funding may not be such an easy nut to crack but there are existing projects sponsored by banks and financial institutions around the world. Dissenting voices would point out however that if it was the banks that got us into this mess are they the best influence to help educate the next generation? Governments may also see the longer term benefits of providing financial education as saving them the money they may otherwise have to spend on social security in the future.

In conclusion it would appear that there is a growing tide of public opinion supporting the need for better financial education, which in my opinion should at least begin in schools. The debate will continue as to who should deliver what and when but in the meantime, parents and young people themselves can take a proactive approach and seek the resources currently available.

A great source for younger children is The Financial Fairy Tales series of award winning books, which introduce money principles and awareness via entertaining and engaging stories.