This is an idea that could really help a future generation from getting into some of the difficulties that their parents have fallen prey to.
What is it?
Some people are saying that we ought to have mandatory education on financial matters (like what APR actually means, and calculating how much tax or interest you will have) i.e. financial education.
Well, the UK has a problem. A problem that looks like this:
People don't understand how to budget, what things like APR mean, how store cards, credit cards and payday loans work and the effect that getting into arrears/debt can have on the rest of their life.
In September 2014 a new curriculum for all subjects will be introduced. That means that this year and next are crucial for debate on what should go on it.
I'm pretty passionate about schooling actually giving kids what they'll need to be competent, engaged citizens.
I certainly didn't learn about interest, tax, how store cards work or anything of that sort when I was at school and it would have been really useful to have some sort of grounding in it before it came to the time to actually use those products.
On the Commonsense Sniff-o-meter this is definitely Pine Fresh. There are several initiatives focussing on financial capability (also called financial literacy) - largely as partnerships between banks and NGOs/charities - to help improve the money management of people of all ages. There are links to some of these at the bottom. They do great work but it would be even better if we had financial education on the statute books so that no one could fall through the net. It could help to create a whole generation of 'financially capable' young people.
A heck of a lot of people, and lots of them could have real clout in getting it on our compulsory curriculum.
Martin Lewis of www.moneysavingexpert.com has been instrumental in getting this issue heard about and debated. He says:
"As a nation, we've educated our youth into debt but never about debt."
In 2011, he started an e-petition for compulsory financial education in schools. E-petitions are an exercise in direct democracy - if you start one up and it gets to the magic number of 100,000 signatures, the petition is considered for a debate in the House of Commons. This is exactly what happened in late October.
On December 15th, that debate took place.
Nick Gibb, the Minister for Schools, was there and he said this: "I think we're all in agreement about the importance of good quality financial education. It is true that young people are growing up in a materialistic world that they are not prepared for."
That sounds promising, but it's not a commitment. Generally the government line has been that they think it's a good idea and that we need to teach schoolchildren about money and give them maths skills that are applicable to real life BUT they're making no promises about it being compulsory. Which to me, is a bit eggy.
There's also what's called an APPG on Financial Education.
APPG = All-Party Parliamentary Group - it means a group of MPs and/or Lords from all different parties, who come together in a group on a specific issue. It's great because it's cross-party, so they're not just getting bogged down in their own party ideals or issues.
The APPG on Financial Education for Young People (launched in January 2011) has 225 members - this makes it one of the biggest ever APPGs. You can read more about it on its page here.
It has a huge list of supporters, such as Action for Children, Barclays, British Banks Association, HSBC, NUS, Lloyds and UCAS. Basically it seems that most of the main players in finance or youth activities want this to happen.
Ah, Carol. She led a study for the Conservatives in 2009 looking into financial education and recommended the very clever tactic of splitting maths into two subjects (like we do with English Literature and English Language) - so 'pure' maths ( stuff like algebra and geometry) and 'functional' maths (financial literacy).
This would mean that for those not very skilled at complex maths, there would still be the opportunity to learn what they needed to understand their finances as adults.
She said this:
“In my view, it is pointless for most 14-year-olds starting their GCSE courses, to be force-fed mathematical topics which they will never use, when what they desperately need is to become more comfortable with numbers including percentages and fractions used in the world of finance,” said Miss Vorderman. [source]
So the idea has huge backing and makes immense logical sense in the light of our current financial situation. UK citizens need to understand money management, have less debt, and learn to save for their old age and the burden of medical bills that can come with it. This could provide the kids of today with a much more financially capable and secure future.
So far there has been no commitment from the government to introduce it into compulsory education. So far, they are saying that it could be compulsory as a part of PSHE/Citizenship - but no commitments have been made and the idea of splitting maths into two parts needs more support from government. 2012 and 2013 will be crucial in keeping financial education high on the agenda and getting it on the statute books.
Further reading/sources:
APPG on Financial Education here - To find out more or to express your interest in become a supporting organisation, please contact kat.hodgkinson@pfeg.org or 020 7330 9488
Statistics on debt are from here and here
Good article from ResPublica (think tank) on why adding it into PSHE isn't the right way to do it here
Barclays Money Skills for financial capability here
Money Makes Sense financial literacy help here
Martin Lewis on what would be taught in financial education here
His general financial education page with loads of links here
What is it?
Some people are saying that we ought to have mandatory education on financial matters (like what APR actually means, and calculating how much tax or interest you will have) i.e. financial education.
Why are they saying that?
- Every day in the UK 331 people are declared insolvent or bankrupt. This is equivalent to 1 person every 60 seconds during each working day.
- 101 properties are repossessed every day
- 9,072 new debt problems dealt with by Citizen Advice Bureaux each working day
- Average household debt in the UK (excluding mortgages) was £7,948 in December.
But this can change
Before the general election in 2010, financial education was a hot topic and it was on Labour's agenda. But then the election happened and we changed government, and it got pushed aside.I'm pretty passionate about schooling actually giving kids what they'll need to be competent, engaged citizens.
I certainly didn't learn about interest, tax, how store cards work or anything of that sort when I was at school and it would have been really useful to have some sort of grounding in it before it came to the time to actually use those products.
 |
| The Commonsense Sniff-o-meter on youcanarguewithstupid: rotten haddock - eggy - pine fresh |
So who's behind it?
A heck of a lot of people, and lots of them could have real clout in getting it on our compulsory curriculum.
 |
| Scrabble fanatic Martin Lewis |
"As a nation, we've educated our youth into debt but never about debt."
In 2011, he started an e-petition for compulsory financial education in schools. E-petitions are an exercise in direct democracy - if you start one up and it gets to the magic number of 100,000 signatures, the petition is considered for a debate in the House of Commons. This is exactly what happened in late October.
On December 15th, that debate took place.
 |
| House of Commons debate, 1886 |
 |
| The Commonsense Sniff-o-meter on youcanarguewithstupid: rotten haddock - eggy - pine fresh |
And that's not all...
APPG = All-Party Parliamentary Group - it means a group of MPs and/or Lords from all different parties, who come together in a group on a specific issue. It's great because it's cross-party, so they're not just getting bogged down in their own party ideals or issues.
The APPG on Financial Education for Young People (launched in January 2011) has 225 members - this makes it one of the biggest ever APPGs. You can read more about it on its page here.
It has a huge list of supporters, such as Action for Children, Barclays, British Banks Association, HSBC, NUS, Lloyds and UCAS. Basically it seems that most of the main players in finance or youth activities want this to happen.
Don't forget Vorders...
 |
| Vorderman at the National Television Awards 2012 |
This would mean that for those not very skilled at complex maths, there would still be the opportunity to learn what they needed to understand their finances as adults.
She said this:
“In my view, it is pointless for most 14-year-olds starting their GCSE courses, to be force-fed mathematical topics which they will never use, when what they desperately need is to become more comfortable with numbers including percentages and fractions used in the world of finance,” said Miss Vorderman. [source]
So the idea has huge backing and makes immense logical sense in the light of our current financial situation. UK citizens need to understand money management, have less debt, and learn to save for their old age and the burden of medical bills that can come with it. This could provide the kids of today with a much more financially capable and secure future.
So far there has been no commitment from the government to introduce it into compulsory education. So far, they are saying that it could be compulsory as a part of PSHE/Citizenship - but no commitments have been made and the idea of splitting maths into two parts needs more support from government. 2012 and 2013 will be crucial in keeping financial education high on the agenda and getting it on the statute books.
youcanarguewithstupid
Further reading/sources:
APPG on Financial Education here - To find out more or to express your interest in become a supporting organisation, please contact kat.hodgkinson@pfeg.org or 020 7330 9488
Statistics on debt are from here and here
Good article from ResPublica (think tank) on why adding it into PSHE isn't the right way to do it here
Barclays Money Skills for financial capability here
Money Makes Sense financial literacy help here
Martin Lewis on what would be taught in financial education here
His general financial education page with loads of links here
