Lessons in finance too little, too late

As has been previously documented on these pages, lessons in personal finance will be administered within mathematics and citizenship, where it is hoped students will learn both the calculations and context for independent financial decision-making.

Financial education has been compulsory in schools in Scotland and Wales since 2008.

You may think therefore, the government has finally recognised that it is more important than ever that young people have the knowledge and skills required to make sound financial decisions.

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However, given the importance the government has placed on the provision of financial education, the approach they have adopted is all the more puzzling.

Despite a plethora of evidence pointing to more effective strategies, stakeholder submissions advising against cross-curricular delivery and campaigning by financial education organisations, the government has chosen to proceed with this myopic citizenship/maths approach.

Disappointingly, the wider industry and previous contributors to this column have been quick to hail the new curriculum as a victory, without questioning its effectiveness or giving any serious consideration to the implications. The mentality is simply “job done”.

It is our concern that the new curriculum will not and cannot deliver financially capable young people. The proposals have the hallmarks of yet another box-ticking exercise by policymakers, anxious to be doing something, but without knowing quite what.

The immediate flaws are as clear as they are large; notwithstanding the obvious fact that most schools these days operate as academies and are not obliged to follow the national curriculum, the point has been missed that financial capability is foremost about behavioural concepts.

Teaching the arithmetic behind things like compound interest is of no benefit if the underlying concept is not contextualised. Put simply, there is no evidence to suggest that acquiring mathematical skills will transfer into capable financial management.

Similarly, while the purpose of Citizenship is supposedly to provide this context, insurmountable obstacles remain. In an already overcrowded subject, how many hours will be dedicated to the teaching of personal finance? Who will be responsible for delivering it and how qualified will they be with a complex subject matter?

A couple of hours a term of lesson time, with a few sessions of training for teachers, will simply not be sufficient.

Other issues are at play here too. Citizenship is no longer inspected by Ofsted, nor is it included within performance league tables.

What chance is there of financial education in Citizenship being effective, when there is no compulsion to examine it? How can anyone, let alone the Department for Education, gauge its effectiveness when learning, understanding and application are not measured?

So what is the solution? In July this year I was appointed as the new vice-principal at the ifs School of Finance and head of its financial capability and schools programmes.

Having spent many years in the financial services industry prior to my current role, I have witnessed first hand the debilitating effects of poor financial skills among adults.