I am backing better financial education in schools by putting my name to the All-Party Parliamentary Group (APPG) on Financial Education for Young People report on Financial Education and the Curriculum launched last month. The report recommends the Government should promote the provision of high quality financial education in schools in England.
Around one in four economically active adults is functionally innumerate. A survey by the UK Payments Council has found a notable lack of knowledge around the meaning of some of the most common financial terms, for example, only 36% of people understand that the term APR relates to payments. Moreover, lack of financial education has cost Brits nearly £250 million in charges and penalties alone, with almost a quarter (24%) having been hit by charges because they don't understand the terms and conditions of financial products, according to research from uSwitch.com.
A survey carried out by the inquiry found that in schools across England the existing provision of personal finance education is ad hoc, with only 45% of teachers reporting that they have ever taught the subject.
The report recommends that:
• Financial education should be compulsory in every school’s curriculum and assessed.
• Every school should have a dedicated ‘champion’ to coordinate financial education drawn from the senior leadership team.
• Banks and businesses can play an important role, particularly the British Bankers Association.
• Primary schools should continue to teach financial education using a cross-curriculum approach, but teachers must be able teach basic maths and money skills.
• Secondary schools should use a cross-curriculum approach grounded in maths and personal social health and economic (PSHE) education.
• PSHE should cover finance education as one of four strands with clear outcomes, and improved training and assessment.
• All teaching materials should be quality marked by a trusted body.
In and ever increasingly complex financial world it is important that young people are fully equipped to make informed financial decisions. I support the improvement of the provision of personal finance in schools and call on the Government to include these recommendations as part of their review of the National Curriculum.
I also spoke on this subject in parliament as a result of an epetition by Martin Lewis.
Martin Lewis of MoneySavingExpert.com, whose e-petition has now had the magic 100,000 sign it said, "For once, thankfully, we have a bunch of politicians who aren't pussy-footing around. They're actually using the C word – compulsory. We need compulsory financial education in our schools. Our nation is financially illiterate, for over 20 years we've educated our youth into debt when they go to university, but never about debt. Breaking this cycle will mean less mis-selling, fewer bad debts, better consumers and could save the public coffers a fortune."