I beg to move,
That leave be given to bring in a Bill to make provision about financial education; and for connected purposes.
Without that education, we are collectively creating the greatest financial crisis of our time. The problem, quite simply, is that we as a nation are not living within our means. There was once a sense that people had certain financial responsibilities: to save for a house, to save for retirement, to save for holidays or for a rainy day—but no more.
Two fifths of Brits have less than £1,000 in savings and, as a result, money has become synonymous with anxiety. How will we pay our bills, our mortgage, our tuition fees and even our meals? We have also ignored people’s anxieties about money for far too long, whether they be university students, apprentices or parents not eating to ensure that their children can. We have high expectations but low means.
An extraordinary and deeply depressing statistic is that 96% of young people worry about money every single day—yet we continue to spend, not least because it is so easy. Offers pop up on our screens every day, created by marketing wizards who know exactly where we are most vulnerable. They use our search history to whet our appetite for new books, video games, appliances and overseas trips. In a single click, we are committed and plunged further into the red.
Around 20 million people effectively pay on account, not to local shop owners who know them and live locally but through impersonal buy now, pay later schemes that bring with them all-too-easy extortionate rates of interest. The debt just keeps on growing. There is a solution, which is to treat the problem at source, through education. Young people need to understand how money works, the principle of saving and the dangers and opportunities of compound interest.
This is not a new idea. The coalition Government brought in financial education for secondary schools, and this Bill aims to consolidate that learning and extend provision to primary schools and tertiary education. Money habits are formed at an early age—indeed, from the age of seven—yet many school leavers remain in the dark. Fifty-five per cent of those employing apprentices are aware that many of their workers face financial difficulties.
The situation does not require extra resource, just extra creativity. In fact, it can bring the curriculum to life. In Finland, for example, money is incorporated into the teaching of all subjects. In maths lessons problems link to savings and debt, geography lessons explain the cost of deforestation on goods in the supermarket, and IT lessons explain the financial consequences of buying extra credit for a favourite video game.
This is not a party political matter. The Bill will reduce inequality and help explain the importance of property, the benefits of home ownership and a comfortable retirement, and what it takes to provide for one’s own family. I have spoken to bankers, teachers, children, parents, police, employers, councillors, accountants, magistrates and lawyers. Whatever their political persuasion, they all agree that money is the root of many of society’s problems, not least because people are increasingly unaware of how to manage it or what is possible through careful budgeting.