- Question for Short Debate
- 7:30 pm
- Asked by
- To ask His Majesty’s Government what steps they are taking to improve the financial literacy of children through the provision of financial education in schools.
- My Lords, I am delighted to bring this debate to the House and thank all those who will contribute today. I declare my interest as an officer of the APPG on Financial Education for Young People.Many of us will remember the world of piggy banks where real cash was kept; you could spend only what you had and no more. With physical money, life was somewhat simpler. Our children are living in a complex world of complicated financial decisions. Buying anything can be a minefield, from tempting credit offers, easy credit store cards and hire purchase to leasing and PCPs, and then there are scams, cyberattacks and payday loans. It is mind-boggling.Banking is now significantly online. Contactless cards and payment by mobile phone make payments wonderfully easy, but spending is made easier too. It is all too quick to spend beyond your means.I want to focus on a few things today. First, financial literacy is a life skill vital in preparing our young people for a rewarding life. Schools have an important role to play, so I hope today’s debate will focus on how we can strengthen and support provision in schools.The London Institute of Banking & Finance reported in 2023 that 68% of children worry about money and their personal finances. Only 8% cited school as their main source of financial education, down from 15% the previous year.Worrying about money is stressful. A survey of adults in the UK by Santander highlighted that 70% reported that better financial education would have improved their ability to manage their finances during the cost of living crisis, and two-thirds of young people believe that a lack of financial education has led them down the path of debt.Money worries are the most important cause of anxiety in the UK, according to research from the Mental Health Foundation. Giving children the skills to manage their money and make informed decisions so they understand savings and investments, pensions, mortgages and loans can have a positive impact on their financial security in the future and on their mental well-being.In 2023, GoHenry with Censuswide and Development Economics reported that prioritising financial education could have a positive impact on the wider economy too, adding nearly £6.98 billion into the UK economy each year and up to £202 billion by 2050. Children and young people are eager to learn. In March last year, the Institute of Banking & Finance reported that 82% would like to learn more about money and finance in school and college, up from 72% a year earlier. Research also tells us that parents want it too.Secondly, financial education is not a statutory part of the national curriculum in primary schools in England. It is, however, embedded in the primary schools of Wales, Scotland and Northern Ireland. Research by Cambridge University, published by the Money and Pensions Service, indicates that habits and attitudes towards money are formed by the age of seven. Therefore, we should make sure that all primary school children, wherever they may live, have access to financial education.
- 7:40 pm
- My Lords, I thank the noble Baroness, Lady Sater, for securing this debate and introducing it so effectively. It is a shame that noble Lords have such a short speaking time this evening but I suppose that is testament to the fact that so many of us feel strongly about the need for young people to be properly prepared in financial literacy. The Education Select Committee feels the same; yesterday, it began its inquiry on this subject.I want to concentrate on the need to include financial education as a compulsory part of primary education. As the noble Baroness said, research for the Money and Pensions Service suggested that money habits are formed as early as the age of seven, highlighting the importance of starting to educate children about financial matters at primary school. This position was emphasised by organisations such as the Centre for Financial Capability, Kickstart Money, Parentkind and the Centre for Social Justice in briefings for this debate, yet England remains the only part of the UK where financial education is not included in the national curriculum at primary school level.That point is clearly stated by the Money and Pensions Service, an arm’s-length body of government sponsored by the DWP, which says on its website:“In England, financial education is included in the national curriculum in secondary schools only”.Yet, in answer to an Oral Question in your Lordships’ House on 13 March last year, the Minister said that“at key stage 1, the compulsory curriculum includes helping children understand how they make choices about how to spend, how to save and how to use money”.—[Official Report, 14/3/23; col. 1192.]If the Minister maintains that position, she is in denial because only around a third of primary school pupils receive any meaningful form of financial education.
- 7:43 pm
- My Lords, I am grateful to my noble friend for introducing this short debate and doing it so well. I have five points to make in the short time I am allowed.First, as we have heard, the 2023 MaPS survey showed that children’s attitudes to money have developed by the age of seven. To encourage good habits and discourage bad ones, they need education young. As the noble Lord said, it should start in primary school.Secondly, financial education is supposed to be part of the secondary school curriculum. The 2023 survey by Comparethemarket and others reported that only 40% of young adult respondents were considered financially literate, while 61% of young adult respondents did not recall receiving financial education at school. Some of them probably did but obviously it was not adequate.That is not surprising; I come to my third point. It is estimated that 11 to 18 year-olds need at least 30 hours of financial education in a school year to become financially literate. However, in fact, those who do receive such education—somewhere around 50% or 60%—get about 48 minutes a month. I calculate that to be around nine hours a year—well short of the 30 hours necessary. It is too little to too few.Fourthly, we now know that schools have a vital role from early in life. Financial education is part of the curriculum but the evidence is that two in five teachers are not even aware that it is a required part. It has been found that, of those who are aware, more than half find it challenging to teach. Perhaps that is not surprising because it is not part of their training.Fifthly, and lastly, we must train teachers and embed this in their continuing professional development. We must ensure that it is taught across all schools and at all ages. The more disadvantaged the child, the greater the need; they will not learn it from their parents. The duty to provide financial education should therefore be put on a statutory basis and include primary schools.
- 7:45 pm
- My Lords, I declare my interest as a state secondary school teacher in design and technology. I join in the thanks to the noble Baroness, Lady Sater, for raising this important topic.As ever, we are talking about the difference between following the curriculum and educating our children. Nick Gibb has been quoted as describing having “good maths” as the gateway to lifelong financial stability, and pointed out that financial knowledge already forms a compulsory part of the national curriculum in secondary school. However, as has been mentioned, only 41% of young adults are financially literate—whatever that means. I would contend that that figure is much lower in reality.Core skills in maths need to be taught but we also need to get to a stage where students can learn financial skills—such as how to compare offers in a supermarket, read a simple balance sheet, shop around for a mortgage or fill in a tax return—as well as other vital skills that are either ignored or left for excellent charities such as Young Enterprise to fulfil during those rare PSHE days. At this point, I must declare that Young Enterprise used to be a client of mine when I was a photographer many years ago.Might it be not only that children could learn some very useful skills but that those skills could perhaps be used in later life for them to start a business, employ people and pay their taxes? In fact, I think that every student who leaves school at 18 should have started at least one business while they were at school. Would that not be fun to learn and teach? Might it inspire students to return to school and teachers to enjoy teaching?
- 7:47 pm
- My Lords, I too thank the noble Baroness, Lady Sater, for securing this debate and introducing it so clearly. I declare my interests as stated in the register.The evidence finds that a child’s attitude towards money is well developed by the age of seven. The foundations of our skills in managing money are laid in these early years. Yet, unlike in the secondary curriculum, financial education is absent from the requirements of the primary curriculum in England. This is seen by 60% of teachers as a key obstacle to its high-quality delivery. Further challenges include training, time and funding. Young Money and City Pay it Forward are examples of external providers supporting teachers with high-quality resources and training.LifeSavers is the financial education programme delivered to primary schools by the Just Finance Foundation, of which my most reverend friend the Archbishop of Canterbury is president. It provides teachers with training, resources and lesson plans, while its innovative saving clubs give children hands-on experience, enabling them to put money-managing skills into practice. It provides a values-based approach and equips teachers to explore with children not only how to use money but how we think about it—that is, what it means to be wise, generous, just and thankful with money. By 2023, it had worked with 202 schools, reaching 53,257 children nationwide.What are the Government doing to ensure that teachers are supported and equipped to teach financial education as a requirement of the primary curriculum? Will they adopt a collaborative approach with external schemes? Surely we want all children to learn the skills of wise money management, enabling them to live generously with money and finance not as a god but as a servant of God’s, humanity’s and creation’s good.
- 7:49 pm
- My Lords, I too thank my noble friend Lady Sater for tabling this important debate. I also thank my friend Vivi Friedgut, who is here in the Chamber, the founder of Blackbullion, an educational technology start-up which is on a mission to empower millions of students to create a better financial future. The company is chaired by my noble friend Lord Fink, who was unable to be here this evening.In discussion Vivi told me quite clearly that the current system is not working and that everyone seems to be looking for a single and simple panacea. No such thing exists. It is a journey, not a destination. From wanting as ever to be practical, I say to the Minister: we need more teacher education. If teachers are confident, they are best placed to weave it into a variety of subjects to bring them to life. Integrate elements of this financial education into other relevant subjects—maths, history, geography, economics, business, life skills—to create a holistic understanding and complement this with dedicated workshops or group work to provide real-world context.Forever being practical, I urge the Minister to meet with Vivi and my noble friend Lord Fink. What they have done among students at universities has created a collaboration between the Bank of England and Pearson Education, and the educational help for financial education is enormous. Some 700,000 students, not just in Britain, are benefiting from the information. Surely, we can use that same technology to get this education across to children—because I notice that even primary school children seem to be holding mobile phones. So I urge the Minister, if he has the time, to meet with Lord Fink and Vivi.
- 7:51 pm
- My Lords, I congratulate the noble Baroness, Lady Sater, on securing this debate and introducing it so well.In two minutes I can do no more than raise three important points about financial education. In a survey, over two-thirds of secondary school teachers did not know that financial education was a curriculum requirement. Nearly two-thirds of young adults did not remember receiving it. As was pointed out earlier, for those who did receive it, it amounted to no more than 48 minutes, as opposed to the 30-hours minimum requirement.Starting with that kind of base, I want to ask three questions about financial education. First, why does it have such a low profile; why is it not widely known, properly researched and talked about? Secondly, what are the consequences of marginalising financial education in this way? If a child’s attitude to money is shaped by the age of seven, what happens to those children who are past the age of seven but have not been exposed to this kind of education at all?My third question relates to the content of financial education. What will you teach in financial education? Will it simply be how to spend money and how to save it? If it is to be proper financial education, it must be about the financial system and about explaining to a child what it is to have £1 and how a piece of paper acquires the value of £1 or £5: in other words, explaining to them how our system works and why money is in some sense central to our social system. Once we do this, children will begin to understand how our society is propelled by money, why it is pathologically obsessed with money and what can be done to avoid the consequences of that obsession.
- 7:54 pm
- My Lords, I thank my noble friend Lady Sater for securing this debate and for her very powerful opening remarks.Many kids today will be alive and transacting in the year 2100. A child who is in year 4 today will in 2100 be only in their 80s and will probably live another 20 years after that. So, when we design content, it needs to be future-proof and include ideas such as “Making money is not a bad thing. Taking risks and losing money—by starting a business, for example—is not the end of the world”. I declare an interest, having done that several times.Thinking big about opportunities is good. I remember that, when the Government set out the ambition of the UK being a global science superpower, many Members of your Lordships’ House objected, saying it was arrogant. I cannot get my head around that. Our kids should be unashamedly ambitious. The world’s population in their lifetime will be just under 12 billion. So, if they are lucky enough to make money, we should teach them to be thoughtful and impactful with it.So let us do all that we can to get third-party providers delivering programmes in schools that focus on the future of money, whether that is decentralised assets or cryptocurrency—not to mention AI, which will completely change insurance, investing and savings as we know them.The next time your child or grandchild decides to create an avatar to sell virtual cookies, taking payment in cryptocurrency, please do not stop them; let them have a shot at it.
- 7:56 pm