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Why we need financial education in schools

TraceyBleakley
by Lovemoney Staff TraceyBleakley on 30 January 2013  |  Comments 7 comments

Guest blogger Tracey Bleakley of the Personal Finance Education Group (pfeg) explains why financial education needs to be part of the national curriculum as a matter of urgency.

Why we need financial education in schools

Last week, financial education charity pfeg (Personal Finance Education Group) announced an exciting new partnership with Experian to transform 20 schools in some of the country’s most financially disadvantaged areas into Centres of Excellence in financial education. This is the first stage in a significant expansion of our Centres of Excellence programme, which will see financial education embedded in hundreds more schools across the country. 

This initiative, and others like it, comes at a crucial time.

Today’s generation of school-leavers face arguably the worst set of economic circumstances of any generation since the Second World War.  While we have seen unemployment as a whole fall over the last few months, the number of 16-24 year olds out of work actually rose in January by 1,000 to 957,000. 

Those young people lucky enough to be in employment are facing a combination of high rents, rising transport costs and squeezed wages.

Five years on from the start of the financial crisis, the fact that we are in difficult economic times is nothing new – but the particular challenges facing young people today means that the issue of how we can give young people the best possible start in life has never been more topical. 

Financial education is absolutely central to achieving this goal – and yet without a place in the curriculum, the teaching of this vital life skill is in short supply.

Making informed decisions

School-leavers are faced with a vast range of personal financial decisions for which too many of them are not being adequately prepared. How do I set a budget? What do I need to do to save enough for the future? How do I check my payslip is correct? Where should I go if I need advice? 

All of these questions, and many more, require a level of knowledge and skill that our education system is largely failing to provide.

At pfeg, we believe financial education should be taught in all schools and colleges, from the age of four right up to 19. Learning how to manage money on a day to day basis is a crucial life skill – but financial education should go much further than this. We believe that becoming a critical consumer, managing risk and your emotions when making financial decisions, and relating money matters to the rest of your life are just as important.

We need every young person to gain the skills, knowledge and confidence they need to be able to manage their money and make informed financial decisions. This includes learning the difference between ‘needs’ and ‘wants’, how to interpret financial information and how to set and stick to a budget. Managing credit safely, understanding the role of insurance and weighing up risk and reward when making financial decisions – and many other topics – are also crucial in preparing young people for life.

The time to act is now

This is a campaign that has widespread support. A 2011 survey of teachers showed that 94% agreed that financial education should be taught in schools. A similar proportion of school-age children polled in a survey last year said that they think every school pupil should be taught to manage their finances. 

We already work with tens of thousands of teachers who are working hard to impart these vital life skills on their pupils. 

In Westminster, the All Party Parliamentary Group (APPG) on Financial Education for Young People has now grown to 250 MPs and Peers from across the political spectrum.  The group, for which pfeg provides the secretariat, is leading the campaign for financial education to be included as a compulsory part of the national curriculum – something the Government has pledged to consider as part of its National Curriculum Review.

That Review is due to report any day now – and we await its conclusions with baited breath.  This is a unique opportunity for the Government to make a real and lasting difference to the financial capability of the UK. 

Financial education has the power to transform young people’s futures – and in these difficult economic times, it has never been more needed.

Tracey Bleakley is chief executive of the Personal Finance Education Group (pfeg).

Is Tracey right? Do we need to incorporate money lessons into the national curriculum? Do we need to do more to ensure young people understand how finance works when they leave education? Let us know your thoughts in the comment box below?

More from Lovemoney:

Charity ends schools education partnership with payday loans company

The skill every child should be forced to learn

Why personal finance in schools will fail

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Comments (7)

  • tuttogallo
    Love rating 99
    tuttogallo said

    Of course personal finance should be taught in schools. Most pupils will leave school not even knowing what compound interest is, let alone how to calculate it. This makes it very easy to get caught in spiralling credit card debt.

    Report on 17 February 2013  |  Love thisLove  0 loves
  • EAM51
    Love rating 0
    EAM51 said

    This thread seems to have died 6 months ago. The need to teach personal finance in schools and colleges is not new - I taught and latterly managed the Business and Finance department in a local college for 25 years and this has always been a theme of mine. I am an accountant.

    It is amazing how little business studies undergraduates understand about the world of finance but even more amazing how little colleagues in other departments understand. Part of the problem though of trying to do this in schools is to ensure there are sufficient teachers who understand the issues from a 'Good housekeeping' perspective - been there, done it, reflected on it. The subject needs to be alive and illustrative but not controversial so that it does not cut across parental actions or situations.

    I have recently married for the second time and was staggered to find that my new husband - although a very clever scientist and mathematician - didn't understand compound nterest in relation to a mortgage.

    I feel very strongly the need for this subject to be taught (well) and would happily join Tracey's group to promote it.

    Report on 02 August 2013  |  Love thisLove  0 loves

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