Personal Finance Education in Schools: A New Generation of Savvy Savers?

Financial Services Team Blog

James Carnegie

With continued criticism of “pay-day” loan companies and economic hardship for many; the Coalition’s draft curriculum publication for England in February 2013, and its promise for compulsory Personal Finance Education has been met with near universal positivity. Potential critics may include school pupils who could find the lessons “boring”, however, traditional arguments from teens that what they are taught in Maths lessons has no bearing on their “everyday lives” will be less convincing from September 2014. This is the date when the new curriculum is implemented into classrooms across the country.

Personal Finance Education is not new to Great Britain, with lessons having been introduced in Scotland in 2008, and Northern Ireland and Wales also following suit soon after. Nevertheless, despite the good intentions of the scheme, the content, regularity and usefulness of such lessons has been brought into question in these countries. Even before February’s announcement, all schools in England have been encouraged to teach about personal finances as part of their broader programme of personal, social, health and economic (PSHE) education. Despite this, a survey conducted by the All Party Parliamentary Group on Financial Education for Young People in 2012 found that only 55% of secondary schools and 31% of primary schools currently teach financial education in some way in England. This will obviously change under the new proposals.

The Personal Finance Education Group (PFEG) has spearheaded the campaign for Personal Finance Education and called the decision a “huge victory”, but the Department of Education faces a sizeable challenge to make lessons in Personal Finance informative, usable and broad enough to engage and help pupils from a wide variety of financial backgrounds and circumstances. The change in the curriculum has the potential to be extremely positive, but the content has to be right. It is difficult to interest and teach someone about something that they may find alien or irrelevant to them for the foreseeable future, so topics covered need to be chosen carefully.

According to documents released so far, lessons will equip all pupils with the skills to manage their money on a daily basis and also plan for future financial needs. This will be through lessons on the importance of creating personal budgets and looking at taxes, debt and financial products and services – so far so broad! Indeed, in AXA’s Big Money Index survey, over 50% of Britons in their late 20s and early 30s blamed their parents for not equipping them to deal with finances, as opposed to a lack of finance education lessons. In fact, in the same survey, only 38% of those questioned wanted personal finance taught in schools. With economic circumstances varying from household to household, should children be taught by their parents in this area as opposed to more formally in the classroom?

In the short term, the decision appears to have caused many questions to arise. For example: How should the proposed topic areas be covered; who should be consulted in formulating the curriculum content (financial companies, charities, “expert consultants”) and how do you make lessons relevant in an area of life that is constantly evolving? Many have called for a more vocational emphasis on how we teach children and if adopted properly and successfully, Personal Finance Education could be a real success story in this regard. However, care needs to be taken to ensure what is taught is relevant, easy to understand and interesting for the children sat in the classroom.