Schools: Financial Education

Lord Davies of Brixton Excerpts

Wednesday 31st January 2024 Lords Chamber

[Lord Davies of Brixton (Lab)]

My Lords, I thank the noble Baroness, Lady Sater, for introducing this important debate. I agree with most of what has been said. Clearly, more must be done and the schools have an important role.

At the risk of being a bit of a grouch, I will say that we must recognise the limitations of financial education. It is important that most of our most important financial decisions, the most complex and difficult, tend to be long-term, such as deciding what pension you will have, what sort of mortgage or what to do with an inheritance, should you receive one. These decisions will be taken long after those involved have left school. Of course, good education involves practice, but you cannot practice taking a pension. The nature of what you teach in financial education should be focused on familiarity rather than the actual decisions that are taken in particular circumstances.

I will just add that I sometimes think that legislators cheerfully place difficult financial decisions on people—freedom of choice in pensions is the one I have in mind, but I am sure there are other examples—because they think people will be financially educated. A policy that requires everyone to be financially educated is a bad policy.