Financial education should “not [be] a luxury but a necessity” say MPs

The debate was obtained by Jerome Mayhew (Con), chair of the all-party parliamentary group (APPG) on financial education for young people which, he told us, is the second-largest APPG in Parliament, beaten only by the one on beer.

Drawing from personal experience, Mayhew said that topics such as personal finance, debt management, budgeting and savings were missing from his own schooling and that of his children. This deficiency, he suggested, perpetuates financial illiteracy, especially among those from economically disadvantaged backgrounds, making prudent financial management a “middle-class secret”.

Mayhew recalled that, back in 2014, financial education had been included in the national curriculum in secondary schools in England, and in primary schools in the devolved nations. Last year, on the 10th anniversary of that change, the APPG undertook research to see what the impact of that inclusion in the national curriculum had been. “The awful truth was that it was virtually negligible, because financial education was not in fact being taught,” he told the House. “55% of teachers responsible for implementing the national curriculum were either unaware of the requirement, or unsure of whether there was a requirement to teach financial education, and 62% of children had no recollection of having received any.”

He said part of the problem is that financial education comes within personal, social, health and economic education, and this is not measured by Ofsted, “and we all know that we get what we measure”. Additionally, teachers lack confidence, because they too have not received financial education. “Far too often, financial education depends on there being a personal convert among the teaching staff. Some schools do a brilliant job on this issue, but too often that is wholly dependent on there being one member of staff who takes the bit between the teeth.”

He cited research from Barclays Bank indicating that financial stress led to the loss of 17.5 million working hours in 2014. Additionally, the Money and Pensions Service found that financial attitudes are largely established by the age of seven. “The single biggest thing we can do for our constituents in our time in this place is get effective financial education into the core curriculum”.

What can be done? Mayhew noted that Young Enterprise had published a report that day called “Making the Classroom Count”. This identifies five steps, he said. First, financial education must be recognised as a core element of the curriculum, measured as such by Ofsted. Second comes greater accountability: “we must inspect for financial education, because we get what we measure”. Third comes guidance: “There must be access to trusted teaching materials for hesitant teachers. Too often, the all-party group heard that teachers were not sure which resources, from the plethora out there, they should trust, and they are naturally hesitant about branded materials coming into schools.” Fourth comes awareness. “Finally — I put it last because it is the least important — comes money and resources. They are necessary — we need money to achieve things — but if the government took steps one to four, we would be 95% of the way there.”

Eight Labour backbenchers echoed Mayhew's concerns, including Louise Jones, David Burton-Sampson and Luke Charters. Jones considered the need for financial education for all a ‘necessity’ not a ‘luxury’. Burton-Sampson said that working in banking he had seen how a lack of financial management blights lives. Charters pointed out the ‘paradox’ of the UK having a world-leading financial services sector while ranking 15th out of 29 countries for adult financial literacy.

Another Labour MP, Amanda Hack, was one of a number of MPs to observe that this was a topic which unites across party lines. She posed the question: “We do not have a natural intuition about how to save or manage debt, or how the tax system works, so why are we sending young people from school with little or no formal financial education?”

Speakers in the debate praised a range of organisations active in the financial education area. Claire Hazelgrove (Lab) praised the work being done by organisations like GoHenry and Young Enterprise. Will Stone (Lab) applauded work being done by Nationwide and Santander. Rachel Taylor (Lab) supported the work being done by the Personal Finance Society, “which carries out important educational work around budgeting and tax, and staying safe from scams”.

A Conservative, Peter Bedford, asked the government to promote financial teaching in post-16 educational settings: “Put simply, one in three students leave school at 16 for apprenticeships or employment. At a time of increased spending, they potentially lose all chance of being taught financial education. Is it any wonder that nearly half of all apprentices struggle to keep up with their bills?”

A Liberal Democrat, Zoe Franklin, said it is “really important that we use the curriculum review to modernise it, and look at a curriculum for life”. She said her view is that putting financial literacy into the maths curriculum “might help young people to see maths as something that is relevant to their real lives”. However a former maths teacher, Chris Vince (Lab), argued against “bolting financial education on to the maths curriculum”, saying he would much prefer it to be a bespoke subject.

Another Lib Dem, Bobby Dean, referenced research by Moneybox which indicates that two-thirds of Britons are £65,000 worse off on average due to “low financial confidence and knowledge”. He highlighted his party’s support for a modernised curriculum, where “children are equipped with the skills required for adulthood, with a focus on a better understanding of personal finance and financial responsibility”.

Both Dean and Charters warned about young people becoming reliant on social media for financial advice – what Charters called the “Tiktokification” of financial education. “We often see influencers giving out unregulated advice, driving the sale of harmful products plugged as “get quick rich” schemes,” he explained. “As a former regulator at the Financial Conduct Authority, I can say with some degree of certainty that regulators are not up to speed on this.” Dean quoted research which had found that six in 10 young people follow “finfluencers”, with 77% trusting their advice. “Alarmingly, one in 10 said that they would act on that advice without doing further research.”

Speaking for the Conservatives, Rebecca Paul, a Chartered Accountant and Chartered Tax Adviser, drew the House's attention to the Conservative government’s achievements in the education sector, including the creation of a national network of 40 maths hubs. Noting that financial education is a statutory part of the primary school curriculum in Wales, Scotland and Northern Ireland (but not England), she said there is “much logic to the argument that financial education… should not wait for the later years, and should be continuous”.

Responding to the concerns, Janet Daby, the Parliamentary Under-Secretary of State for Education, acknowledged the issue and outlined existing measures, including the national curriculum for mathematics and citizenship at various key stages. She said the primary maths curriculum includes arithmetic knowledge that supports pupils’ abilities to manage budgets and money, such as knowledge to do with calculations involving money and percentages.

The minister referenced the ongoing curriculum and assessment review, which “seeks to deliver an excellent foundation in core subjects, including maths, and a rich and broad, inclusive and innovative curriculum that readies young people for life and work.” She added that the review group will publish an interim report in early spring setting out its interim findings and confirming the key areas for further work, ahead of a final report with recommendations in the autumn. She assured MPs that the government would consider the suitability of support available to schools in light of the review's outcomes.

Daby concluded the debate by highlighting some of the resources and support already available to schools. This includes guidance from the Money and Pensions Service, which also funds the ‘financial education quality mark’, which is delivered by Young Enterprise, who provide resources with the quality mark in their ‘Young Money’ hub. It also includes resources from Oak National Academy, an independent public body providing an online classroom and resource hub in the UK. Oak will be producing additional lessons on financial education and applying maths in real life contexts across key stages 1 to 4, she said. She added that, in 2023, members of UK Finance, including banks and other financial service providers, provided financial education lessons to more than 4.1 million children and young people.