Financial education has been on the curriculum since 2014 in England. But is it really working?
It’s been five years since the (notional) introduction of money lessons in schools. But these still have no formal slot in the curriculum, no government-funded resources and no exam requirement. Financial education is – in effect – being strangled at birth.
I haven’t been alone in sharing my concerns about the way money has been squeezed out of the school timetable. So I was pleased to add my signature to a letter calling on our current education secretary – Gavin Williamson – to take financial education seriously. The letter, spearheaded by ParentPay CEO Clint Wilson, was recently mentioned by the Telegraph but not published or discussed properly, so here it is in full.
10th September 2019
Rt Hon Gavin Williamson MP
Secretary of State for Education
House of Commons
London, SW1A 0AA
Dear Gavin Williamson MP,
Children are the future of our country and its economy; we must improve how we teach financial literacy.
September marks the five-year anniversary of the inclusion of financial literacy on the national curriculum. Supporters of the reforms – rightly concerned about the lack of formal instruction – hoped these would ensure that children left school with the financial confidence and competence to navigate a world of consumer credit and payday loans. Five years later, however, there is clear evidence that we still have a long way to go.
Of course, since the reforms were implemented, the continued growth of cashless payments has complicated the matter. Whilst contactless cards may be a source of convenience for adults, they can encourage children to lose sight of their spending, blowing months of careful saving in just a few taps. To survive in a world where money can be spent so easily, we must ensure children are properly instructed; to not do so is, frankly, dangerous.
Recent research, for instance, has revealed that 6 in 10 children are leaving school with no money management skills, whilst at a Conservative Leadership husting, Boris Johnson noted that questions on youth financial education were amongst the most frequent. Parents across the country are aware of the scale of the problem, so the question is how, not if, we should act.
Edged out of timetables
We are aware of the manifold pressures on school timetables and we are not seeking to impugn the fantastic efforts in classrooms up and down the country. It is simply too often the case, as research by the London Institute of Banking & Finance has found, that financial literacy is squeezed out of crammed timetables.
The research sounds a stark warning: time spent on financial literacy lessons has dropped, dramatically. In 2018, a mere 33 per cent of students had had a financial literacy lesson ‘in the last month’, compared with 43 per cent who said the same in 2017.
Schools struggle to prioritise the time to prepare and deliver a specialist subject that is not examined, inspected by Ofsted, or required for pupils to progress to the next stage, especially with little mandate to include financial literacy within the curriculum.
There is also strong anecdotal evidence to suggest that when lessons do take place, they are taught in a dry, academic way that is distinct from how children will experience money beyond the school gates. Indeed, research by financial education charity MyBnk found that 73 per cent of teachers felt dedicated full-time trainers were better equipped to deliver lessons about money than other teachers.
Including a discussion of interest rates, or compound interest in mathematics classes is, of course, commendable, but without separate and concentrated hands-on lessons, which is how children learn best, and without using experts or well-supported teachers, we risk encouraging young people to see money as an issue solely for the classroom. It is, perhaps, for this reason that youth money management app nimbl found that only 1 per cent of parents, whose children who save regularly, feel schools are responsible for this behavior.
“When lessons do take place, they are taught in a dry, academic way that is distinct from how children will experience money beyond the school gates.”
What’s more, the reforms have failed to keep up with the broader societal developments. Lessons still focus on money in its physical form – cash – rather than on cashless alternatives. Children’s piggybanks have gone digital; lessons must do, too. Put another way, there would be an outcry if children were taught to use typewriters rather than computers in IT classes, so why are we allowing similar to happen with money?
Education can pay long-term dividends UK household debt, which now stands at record levels, is a widespread concern, not least for the Treasury.
With research from the University of Cambridge revealing that attitudes to money are set by the age of 7, the solution lies not in trying to encourage responsibility in adulthood, but teaching them in childhood. Early lessons could pay long-term dividends.
Those of us who lived through the last recession keenly understand the risks of irresponsible spending and borrowing. Raising a generation of taxpayers, well versed in money and its uses, can only stand to benefit the country and its economy. 51 per cent of teenagers have been in debt before the age of 17, this cannot be allowed to continue.
In its International Network on Financial Education, the OECD has made a number of suggestions that we call on HM Government to implement, including starting financial education as early as possible and, where feasible, teaching financial literacy as a stand-alone subject.
In addition, we urge further steps, including…
- Start formal instruction in primary school where, at present, specific financial education is not a requirement;
- In both primary and secondary schools, include financial literacy as a subject in its own right. Currently, financial topics are covered within wider mathematics topics or in citizenship classes that are not focused on financial education alone. Rather than roll financial literacy further into mathematics and PSHE lessons, ensure at least one 30-minute session every two weeks is included on the curriculum. As noted, there are already pressures for space in time tables, but with 3 per cent of schools already having a dedicated lesson, it can be done;
- Introduce a formal exam as a vital way of measuring the progress of children. Whilst pupils in Key Stage 3 will be tested on topics such as interest rates in mathematics exams, issues taught in Citizenship classes across Key Stages 3 and 4, such as the practices of budgeting, income, savings and pensions, are not formally assessed. Implementing a formal assessment of financial topics would thus incentivise the learning of financial topics;
- Ring-fence funding so lessons can be taught in a hands-on, practical way, with recourse to external speakers and trips to financial institutions
- Devolved regions of the UK have already implemented some of the above, with students in Scotland taught about the use of bank cards before the age of 11, and primary school pupils in Wales learning how to calculate profits and manage savings – it is time this was rolled out in England, too.
As a first step, I would like to propose a meeting with you and your team to discuss how we can make a difference together.
Thank you for your time and I look forward to hearing from you.
Clint Wilson, CEO of ParentPay and nimbl
Alvin Hall, financial educator, author and broadcaster
John Jerrim, Professor of Education and Social Statistics at UCL
Patrick Leman, Professor of Psychology at King’s College London
Gavin Oldham OBE, Chair of The Share Foundation
Bram van Eijk, Co-Director at Child & Youth Finance International
Philip Blond, Director of ResPublica
Daniel Godfrey, former Chair of the Personal Finance Education Group
Catherine Winter, Head of Financial Capability-Relationships at the London Institute of Banking and Finance
Andrew Craig, Investment Manager and founder of Plain English Finance
Bernie Hollywood OBE, social entrepreneur, adventurer and philanthropist
Richard Wilson, CEO of Interactive Investor
Moira O’Neill, Head of Personal Finance at Interactive Investor
Alex Kovach, Chief Commercial Officer, Interactive Investor
Iona Bain, founder of the Young Money Blog & Agency
Rebecca Ginger, CEO of Table Fables