Financial education in schools still lacking, say MPs

In a Westminster Hall debate on Wednesday 6 September, they said many young people were leaving school without a full understanding of issues including tax, wages and debt, which can affect them later in life.

Jerome Mayhew (Conservative), who led the debate, said he grew up with “no financial education at all” and that, 40 years on, neither had his own children. This is despite, he said, “a huge amount of research [being] done by academics and the financial sector on how important financial training is for people’s ability to lead normal, high-quality, independent lives”.

He added that despite financial education being made part of the secondary curriculum in 2014, more than half of teachers are unaware of this, according to data. He said: “We know that there is a lack of awareness. We know that it is something that is added in, perhaps as an afterthought, and not part of the core curriculum.”

Mayhew also questioned the ability of teachers to deliver financial education without additional support and training, suggesting specialist “financial education trainers” should be allowed to come into schools. “Many of them are very keen to do so,” he added.

Miriam Cates (Conservative), a former teacher, said it is “really important for young people to understand the link between working hard at school, getting qualifications and leading the lifestyle they want to lead”.

She said while financial education should “start at home”, there is also an “important role” for schools and suggested it should be added to the maths curriculum. “We absolutely must see financial education as a core subject in schools and the home,” she said.

Seema Malhotra (Labour/Co-op) said the lack of retention of teachers is causing “huge instability” at schools. She said: “That is why what Labour has outlined, including using the money from ending private schools’ tax breaks to support recruitment in our schools to plug the skills gaps, is really important for how we deliver education.”

She shared an example from Isleworth & Syon School which some of her west London constituents attend. “Every student receives lessons over eight weeks in year 10, covering topics such as wages, tax, budgeting, debt and borrowing, and ethical consumerism. Sixth-form students receive additional lessons on budgeting before they head off to university or apprenticeships. The importance of the integrating financial education within the wider curriculum is also recognised, including in weekly maths lessons, where it can have an impact, and within economics and business lessons.”

Malhotra said the feedback was that pupils really liked to learn about financial topics – headteachers had told her they ask lots of questions and give ‘really good feedback’ at the end of the sessions.

Andy Carter (Conservative) said that, on recent visits to schools, he was struck by the “level of ignorance about where public funding comes from”. He said: “I remember saying to them, ‘The Government have no money. The only money the Government have is our money, and the only way they generate money is by taxes. When you go to work, you’re going to contribute your taxes. The more you earn, the more you’re going to contribute.’ I could see their faces changing very quickly. The idea of paying into this system was not something that they were aware of.”

Carter also asked what support and training is on offer to teachers, including what partnerships have been encouraged with business and organisations to help to skill teachers. He said: “Does he (the minister) agree that what we have classed as macroeconomics—the taxation system and the way we fund services—should be taught to everybody as they go through school, not just to those who study economics at A-level?”

Marion Fellows (SNP) said in Scotland, where education is devolved, financial education has been incorporated into both the primary and the secondary school curriculums, while “money management” skills have also been introduced in other aspects of the curriculum. She said: “Strong financial education is increasingly important in a financial crisis. It is important that people – especially young people – have a sound financial backing.”

New shadow education minister Catherine McKinnell was alarmed that the UK ranks in the bottom half of OECD countries in financial literacy. “Financial education is patchy across the country, and many schools struggle to teach it... A Bank of England survey in March found that almost two thirds of teachers cited a lack of dedicated time in the timetable for delivery.”

The shadow minister said that the next Labour government would urgently commission a full, expert-led review of the curriculum and assessment: “We need a curriculum that is broad, rich, innovative and develops children’s knowledge and skills—a curriculum that ensures children leave school ready for life and builds on the knowledge, skills and attributes that they need to survive.” Labour will recruit thousands of new teachers and ensure “that all schools are properly staffed, that maths classes are taught by trained maths teachers and that teachers are given manageable workloads”, she promised.

Responding, the Minister for Schools, Nick Gibb, said evidence shows that the knowledge, attitudes and behaviour that help people to manage money and achieve good financial wellbeing begin to develop from an early age and continue throughout childhood and the teenage years, while “good maths is the gateway to lifelong financial stability.”

He said “significant progress” has been made since 2010 in “transforming the way that maths is taught in schools”, with international surveys showing that England performs above the international averages for the subject.

Gibb said the national network of 40 maths hubs “supports schools to improve their maths teaching, including financial content in the mathematics curriculum”, while the Secretary of State recently announced this would be expanded to reach 75% of primary schools and 65% of secondary schools by 2025.

He added that recruiting and retaining teachers is “crucial to every curriculum subject”, and teacher training is being “overhauled”. He added that the Money and Pensions Service is investing over £1 million through a grant programme that “includes testing approaches to embedding and scaling teacher training in financial education”.

Concluding, Mayhew said: “Financial education is a hugely important subject and it has been treated as such by all contributors. There is so much agreement on the state of the problem, but in my submission there is more work to be done on the strength of the answer.”

Read the full debate here.