Letter to the education secretary and Financial Services Consumer panel calls for a series of urgent measures to address the effect of a lack of financial capability in the UK.
The Rt. Hon. Nadhim Zahawi MP
Secretary of State for Education
20 Great Smith St
Financial Services Consumer Panel
12 Endeavour Square
13 December 2021
Dear Mr Zahawi and Ms Goldwag,
Re: Financial Education in schools
As judges of the interactive investor Personal Finance Teacher of the Year Awards, and with extensive collective experience of financial education in schools, we write this open letter to you today in frustration – it is time to take the financial education of our children and young people seriously.
We ask for a series of urgent measures that address the effect of a lack of financial capability in the UK.
We would like to see the Department of Education:
- Extending mandatory financial education to primary schools and Sixth Forms in England to ensure fewer young people miss out on a financial education.
- Work with HM Treasury to restore funding dedicated to developing meaningful financial capability within schools. That can be delivered in a variety of ways depending on the setting, but could include teaching it as a separate subject or developing dedicated content for teachers to incorporate into other relevant subjects on a regular basis.
Last week, we announced the winners of the 2021 interactive investor Personal Finance Teacher of the year Awards. Every year we see the positive impact these teachers are having through high quality personal finance lessons. But they are the exception, not the rule.
Financial education is currently not structured to succeed. It is not easy for schools to deliver meaningful money lessons in a crowded curriculum, and arguably even less so now, given the additional strain placed on schools due to the pandemic.
Our winners and judges are passionate about personal finance education. We see some of the best teachers from schools in socially deprived areas speak with first-hand experience. They know that money management skills and pupil attainment are inextricably linked.
Financial education is a vital tool in the UK’s recovery, against a backdrop of a cost-of-living squeeze and the impact of the pandemic still being felt economically as well as socially. With the levelling up agenda a long-term commitment, we ask the government to give personal finance lessons the priority they deserve.
In 2014, financial education became part of the secondary school curriculum in England, but far more needs to be done. Less than half of pupils report having received it, according to the Money and Pension Service. The subject remains side-lined, jostling for space with many other topics in the ‘Citizenship’ programme in Key Stages 3-4 and not compulsory in primary schools, academies, private schools, faith schools or Sixth Forms. Some schools are doing fantastic work in this area, but they are doing this on their own steam. They are trailblazers, in the absence of mandated space on the curriculum.
Sadly, there is a clear link between young people who are most in need of financial education and financial deprivation. Research from The Centre for Financial Capability and the charity MyBnk shows 76% of schools with children most in need of financial education are in more deprived areas, with 67% of those schools above the national average for pupils eligible to receive free school meals.
Financial education is a core life skill for all children, and particularly those from poorer backgrounds. Whatever subjects pupils choose to specialise in, everyone needs to understand how to budget, how savings can accumulate over time, and the need to plan for a secure future.
Moreover, it is something parents want and recognise as important. Interactive investor asked 2,000 UK adults what could have the biggest impact on children’s long-term financial security and teaching them how to manage money was the most-cited answer (42%). When asked what was most important to pass on to younger generations, the top-rated answer was passing on financial education skills (53%). That was way ahead of the passing on of wealth (18%). The survey was conducted between 2-5 November 2021 by Opinium for interactive investor.
More and more families are facing financial hardship. In a recent survey by the London Institute of Banking & Finance, 59% of young people said the pandemic had made them more anxious about money.
Some financial education is better than none, but more needs to be done. We are calling for financial education to receive the attention and lesson time it deserves.
We would be happy to engage further with you on this vitally important topic.
The judges of the interactive investor Personal Finance Teacher of the Year Award 2021, who were:
Claer Barrett, Consumer Editor, Financial Times and trustee of the FT’s Financial Literacy and Inclusion Campaign
Dominic Vallier, Head of Financial Education Relationship Managers, London Institute of Banking and Finance
Guy Rigden, Chief Executive of charity MyBnk
Jeff Prestridge, Personal Finance Editor, Mail on Sunday
Richard Wilson, CEO, interactive investor
Russell Winnard, Chief Operating Officer, Young Enterprise
Moira O’Neill, Head of Personal Finance, interactive investor
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