Thomas Docherty's private members' bill has its second reading in parliament. He sets out why it is needed and Tracey Bleakley from pfeg responds.
There is a general recognition across the UK that financial literacy and decision making are important for young people.
Whilst in Scotland there is provision for financial education for young people, in England this is not the case. In their December 2011 report the All Party Group on Financial Education for Young People found that 45% of teachers in their survey reporting that they have taught the subject.
By introducing financial education into the curriculum we will not just be teaching young people how to calculate compound interest and APR, but also teaching them about risk and giving them the knowledge to reach decisions when it comes to using their money.
Financial education is important for the generation of children currently going through the school system. In 2020 the first Child Trust Funds will mature, with large numbers of 18 year olds having access to potentially significant amounts of money for the first time, and it is important that when this happens our young people have the skills to make their money work for them.
The Government need to look now at the varied nature of financial education teaching in England so that we can build on the work that is already carried out in this area. The haphazard nature of teaching financial education and the amount of anecdotal evidence to support this should be clarified urgently by the Government.
Financial education covers many different skills across the curriculum and we need to look at the best way of teaching this subject, whether it is in Mathematics or Personal, Social and Health Education (PSHE) lessons. My Bill proposes locating financial education as part of PSHE, however there is an important debate to be had about how we meet the cross curricular demands of this subject.
With finances tight for so many families it is vitally important that when young people reach college, university or the workplace they have the skills to make their money go as far as possible.
Thomas Docherty is the Labour MP for Dumfermline and West Fife.
Response from Tracey Bleakley, chief executive of pfeg (Personal Finance Education Group)
Across the country, schools, charities, colleges, indeed the entire education sector, are awaiting two key announcements from the Department for Education. As part of the Schools White paper in July 2011, the Department launched reviews into the National Curriculum and into non-statutory personal, social, health and economic education, or PSHE.
These announcements represent a key moment for the campaign for financial education in schools – a campaign that has been led in Parliament by the All Party Parliamentary Group (APPG) on Financial Education for Young People, chaired by Justin Tomlinson MP. Today’s Private Members' Bill put forward by Thomas Docherty MP has ensured that financial education remains high on the Westminster agenda at this critical time.
The Department for Education’s two separate reviews are an important opportunity to further cross-curriculum working and the integration of core content – something that is crucial for high quality financial education While it is not possible to overstate the importance of core knowledge such as literacy and numeracy, PSHE provides an opportunity for educators to link up strands of the curriculum, and augment learning through application to real life.
Financial education can and should be taught in maths, to learn for example how to calculate compound interest rates, currency conversions and other key elements of financial arithmetic. However, becoming a critical consumer is not just about calculating value for money, it is learning about influences on spending and saving, resisting unwanted pressures and assessing the difference between risk and reward. It is about knowing where to find independent and sound financial advice, and also understanding that decisions about money can lead to stress and contribute to problems with health, wellbeing and relationships. This side of financial education cannot be taught in mathematics, but is crucial for the development of young citizens who are well prepared for the world of work.
After its comprehensive inquiry into financial education in schools, the APPG on Financial Education for Young People recommended to the DfE that personal finance education should be a compulsory part of the school curriculum. The DfE are considering the APPG’s report, and there are some reasons to be hopeful.
In Wednesday’s Westminster Hall debate on PSHE, Elizabeth Truss confirmed that the Department was including more elements of financial education into the maths curriculum. She also stressed the importance of the PSHE review properly interfacing with the National Curriculum Review. These statements give cause for optimism to those of us who have been campaigning for financial education to be introduced as a statutory requirement, and in a cross-curricula way.
Financial education is an issue that stretches far beyond the school gates to our high streets, kitchen tables, and the UK economy. The government now has a unique opportunity to make a lasting change to our school system, and ensure that future generations enter adult life with the financial skills, knowledge and confidence they need to survive and thrive in our society.