Proposal #9: The National Curriculum should include credit management and personal finance education
According to the DCSF, ‘financial education is a cornerstone of PSHE‘ and has featured in the PSHE and Citizenship curricula at Key Stages 3 and 4 since 2002. So why, every day at the CAB, do I speak to young people – some of whom started Key Stage 3 in 2002 – who have signed up to credit agreements they don’t understand; or have fallen behind on their council tax to keep up their HP payments; or who believed the bailiffs when they said “Let us in or we’ll call the police”? Why do only 38% of 16-24s know how much they have in the bank? Remember – 17.6% of 18-24s are not in education, employment or training. If you don’t know how much of your £101.90 Jobseeker’s you’ve got for the rest of the fortnight, you’re probably in trouble.
In the current curriculum, financial literacy appears tacked on. The DCSF website Teachernet points out that ‘it is not a compulsory teaching subject in its own right’, and lists a PSHE framework in which credit doesn’t get a mention. For younger children, financial education is centred around Child Trust Funds – a wonderful Labour policy, but the Child Poverty Action Group has raised concerns about the appropriateness of drawing children’s attention to their different families’ respective capacities for saving.
Moreover, the government-funded Personal Finance Education Group suggests bringing in ‘volunteers’ from HSBC for financial education lessons in primary schools. Is it just me, or is employing the banks to teach kids about money a bit like getting Playboy to teach them about sex?
It’s that comparison between financial education and sex education that I find most compelling. If the papers are to be believed – and let’s pretend for a moment that they are – you can’t move for condoms in the schools these days. Kids have got sex ed coming – excuse the phrase – out of their ears, and rightly so: if young people are unprepared for sex they’re left open to major disruptions to their life, career prospects, psychological wellbeing and health.
But can’t we say the same of those young people unprepared for dealing with debt? Why isn’t financial responsibility given as much emphasis? Why not give them a JSA-sized wad of Monopoly money each, set them to making a budget and see if they remember to save some for the water bill? Why not get the local CAB or another debt advice agency in for an afternoon? It is another addition to an already crowded curriculum, and I’m sure any teachers reading this will ask where exactly I think this could be shoehorned in; but I’m also sure they can think of at least one thing they’d be happy to drop. One less Wake Up Shake Up session a week wouldn’t kill anyone, for instance.
We can’t rely on parents to teach financial literacy – not only because so many parents are struggling with their own financial problems, but because so many young people have financial experiences significantly different from that of their parents. More young people than ever before are going to university – how can parents who live on weekly wages teach their children to budget for a thousand pounds per term? How can parents in receipt of housing benefit prepare their children for the responsibility of paying rent – or vice versa?
Increasing and improving the provision of financial education would be a vote-winner as well as a powerful weapon against poverty: according to a YouGov poll for Insight Investment, 87 per cent of people felt financial literacy should be introduced as a compulsory topic to the school curriculum. Make financial education compulsory; make it independent of the banks, and of anyone else who has an interest in getting young people into debt; and make it relevant to young people’s lives. Teach them about their rights when they sign a credit agreement. Teach them that no matter how many times the bank calls them, they need to pay their rent before they pay their credit card bill. Teach them about bailiffs. It will save us all a lot of money in the end.