The truth is that opponents of financial education are hard to find. The cause has the backing of teachers, parents and young people themselves. The financial services industry, including the adviser community, has been vocal in its support. More than 250 MPs and peers from across the political spectrum have led calls for it to be made compulsory in schools.
Financial education is an idea whose time has come. This month the government finally agreed to give it the place it deserves as a compulsory part of the new draft national curriculum for England.
This huge victory is the result of two years of hard work by the All-Party Parliamentary Group on Financial Education for Young People, with the support of national charity Personal Finance Education Group and MoneySavingExpert.com’s Martin Lewis.
In December 2011 the group published a report on its six-month inquiry into financial education and called for personal finance to be embedded in the curriculum. Around the same time more than 118,000 people signed an e-petition, started by Martin Lewis, calling for financial education to be made compulsory.
Since then there has been been relentless lobbying of ministers to accept the conclusions of the group’s inquiry. With financial mathematics set to be included in mathematics and financial capability embedded in citizenship education for 11 to 16 year olds for the first time, the campaign has achieved both of its objectives. We are delighted that ministers have listened on both fronts.
The inclusion of financial mathematics means that young people will now be taught the ‘factual’ aspect of personal finance – such as calculating and comparing the cost of loans or different energy tariffs – to a greater extent. Of course financial decisions rarely have right or wrong answers, which is why it is pleasing that the more subjective, decision-making side of financial education has been included in citizenship lessons for the first time.
The arguments in favour of teaching these crucial life skills in schools are well rehearsed. Teaching young people how to manage their personal finances helps prepare them for complex financial decisions they would otherwise be ill-prepared to make. It can help prevent young people falling into unmanageable debt and empowers the next generation of consumers to make savvy decisions about their spending.
These benefits cannot come soon enough for young people. In a survey conducted for Pfeg last year, 43 per cent of seven to 16 year olds said they worried about money. An earlier survey showed that 82 per cent of 11 to 17 year olds had borrowed money from someone else. This year’s school-leavers face possibly the most serious set of economic conditions of any generation since the second world war. Youth unemployment rose by 1000 in January to 957,000. Those fortunate enough to be in work are facing a dangerous combination of high rents, rising transport costs and a relentless squeeze on take-home pay.
Financial education is of course far from the only answer to the financial problems that young people will face in their lives, but it can make a significant difference to their life prospects. By equipping every young person with these vital life skills in the school environment, we can ensure that future generations enter adult life better equipped to survive and thrive in our economy and maximise their opportunities.
The new draft curriculum is now open for consultation, with the first financial education lessons set to start in September 2014. This is a short window, which is why Pfeg’s top priority is now to work with the department for education to maximise the benefit that the new curriculum content will bring to young people.
Fortunately Pfeg is not starting from scratch. There has been significant progress made in spreading financial education across the country and in 12 years it has worked with more than 40,000 teachers in 8500 schools to embed personal finance in their teaching.
Also 39 centres of excellence have been created across the country – schools or school clusters that have been recognised as beacons of best practice in the teaching of financial education. This programme is expanding with 68 new centres on the way and an ambitious plan to create 1200 in total.
Nearly 1800 student teachers have also benefited from a specialist teacher-training programme. If properly funded, the plans can embed financial education in the education system for good. Pfeg is exploring ways of securing the funding needed to make this long-overdue dream a reality.
Securing a place for financial education in the national curriculum is a giant leap forward, but we are still at the foot of a mountain. This is only the first step in a wider campaign for financial education to be taught in every school in the UK. This means ensuring that young people in the growing number of academies and free schools who are not bound to follow the national curriculum receive the same benefit that has just been brought to millions of young people.
The campaign can now add the support of the government to its long list of proponents – a giant leap forward for financial education in the UK. We now have a once in a lifetime opportunity to get financial education right, and must keep up the momentum. The prospects of millions of young people depend on it.
Tracey Bleakley is chief executive of Personal Finance Education Group
Key points
The government has included financial education as a compulsory part of the new draft national curriculum for England.
Teaching young people how to manage their personal finances will help to prepare them for complex financial decisions they would otherwise be ill-prepared to make.
Securing a place for financial education in the national curriculum is a giant leap forward, but we are still at the foot of a mountain.
