Teaching young people about personal finance is more important than ever and for the first time there is a serious push in Parliament to get it on the national curriculum. Rachael Adams reports
Momentum is growing to put personal finance education on the national curriculum, with the launch of an all-party Parliamentary group on financial education.
On March 16, the group opened an inquiry into financial education and the curriculum, led by Conservative MP for Brigg and Goole Andrew Percy. It aims to create a sustainable model for financial education and is looking at models for education and how to support teachers.
Percy says: “It is a select- committee-style inquiry. We are aware that patchy financial education is available around the country and are looking at where it can fit into the curriculum. We want a national approach so kids have access to the same financial education no matter where they are.”
The group has received widespread support from the industry and in Parliament. Organisations backing the group include Barclays, Nationwide, Capital One, HSBC, Which?, educational charity the Personal Finance Education Group and the Consumer Financial Education Body.
A total of 215 MPs have signed up and Pfeg chief executive Wendy van den Hende says: “The massive interest from MPs demonstrates how keen their constituents are to get personal finance taught in schools. The inquiry will provide useful evidence of how it might best fit into the revised curriculum, as it is currently not a statutory requirement.”
Ifs School of Finance vice-principal Rod McKee says: “Equipping young people with the knowledge to make informed financial decisions is vital.”
This is the first cross-party Parliamentary inquiry into personal finance education but the group will be joining a number of industry initiatives. Pfeg’s What Money Means programme has worked with local authorities to bring financial education to 10,000 primary schools and its Learning Money Matters scheme, ending this month, has ensured financial education is ongoing in 4,216 secondary schools.
Commercial organisations are also contributing to financial education. Lloyds’ Money for Life programme is designed to embed money management skills in further education. Barclays’ Money Skills initiative will see 90,000 students take part in its Money Skills Weeks this year.
But the limited resources and narrow focus of such schemes limits their potential to make a difference. Although Pfeg is engaged with 88 per cent of secondary schools and 50 per cent of primaries, there is room for improvement.
McKee says: “Bodies such as Pfeg and the National Skills Academy have an important role to play but these institutions can only achieve so much and cannot possibly achieve consistent improvement of financial capability in young people across the whole country. This is where having money management taught in schools can make a really big difference.”
This is where the new group may bring some-thing new to the table. It will offer its findings to the Government’s national curriculum review which will be published in October. The group’s aim to make financial education compulsory in schools goes further than any existing initiatives.
Percy says: “A lot of schools and external providers put good programmes together but they cannot get into every school and they only come in for a limited period, sometimes a week, sometimes a day. Financial education should be carried through from stage one upwards.”
The big question is how to fit personal finance into the curriculum. Should teachers or external experts deliver the education? The consensus seems to be that teachers are the best way, with Percy stating “it has to be teachers”.
Van den Hende says: “We feel strongly that the most effective model is for teachers to deliver it. External experts have a supporting role but it is teachers who understand curriculum objectives.”
Whether personal finance should be taught as a standalone subject or peppered across a range of subjects is another problem. Van den Hende cites “a combination of personal, social, health and economic education and mathematics” as the best vehicle.
But McKee says: “We do not believe sprinkling small amounts of financial education into a number of different subjects such as personal social health and economic education and citizenship is effective.
“Research by the University of Manchester demonstrates beyond doubt that standalone financial education can dramatically improve individuals’ knowledge and that long-lasting change can be achieved as a result.”
The group’s inquiry will be looking at both approaches to find the best model.
One other factor that may see the group succeed in its aims is the timing. Increased competition for jobs, decreased state retirement provision and the trebling of university fees means young people will need to know more than ever how to deal with debt.
McKee says: “There has always been a need for financial education in schools. However, factors such as the recession and the increasing complexity of financial products make it more important now.”
Van den Hende says: “Financial education is even more important today, not just because of the recession but also because of the sophistication of the decisions young people have to take at an early age. The media interest on the recession means young people are aware of the difficulties individuals face managing their money.”
This increase in awareness may be why support for financial education is beginning to reach beyond the industry, with 97 per cent of people supporting its inclusion in schools. In response to Michael Gove’s omission of some subjects from the English Baccalaureate, an ifs School of Finance report this month found that teachers and students place more importance on learning about personal finance than on religious education and music.
With increased public awareness and weighty support behind teaching personal finance, it looks like the all-party Parliamentary group may make a bigger splash than previous initiatives.
Percy says: “You get change by applying pressure on policymakers and that is what we are doing.”