Financial Education in Schools

Catherine McKinnell Excerpts

Wednesday 6th September 2023 Westminster Hall

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

It is a real pleasure to serve under you as Chair, Dame Angela. I am really delighted to take on this role as shadow schools Minister, as part of Labour’s education team. I have long believed that every child deserves the best start in life. Ensuring that we have the best schools and the best education and support for all children is key to ensuring that.

I thank the hon. Member for Broadland (Jerome Mayhew) for securing this debate and opening it so thoroughly and for his work on the all-party parliamentary group on financial education for young people. He made a compelling case and set out the issues very clearly indeed. I also pay tribute to the teachers, school staff and charities across the country—which many hon. Members have mentioned—that are working really hard to improve the financial literacy of our young people.

The purpose of education should be to enable young people to understand the world around them, to explore and develop their interests and to prepare them for their futures with the knowledge and skills they will need to thrive throughout life. We know—we have heard many testimonies today—that managing money is fundamental to a person’s stability and security. Whether it is working out prices in a supermarket—no tall order—managing a household budget or figuring out the terms of a mortgage or loan, everybody, regardless of their background, needs to be equipped to make these everyday financial decisions. We have heard the evidence: people who are financially literate are much more likely to have savings, to avoid scams and fraud and to invest their money effectively. This should not be left to chance. Financial literacy is important not just to households, but to our society.

We have heard compelling speeches from all Members who have contributed to today’s debate—my hon. Friend the Member for Feltham and Heston (Seema Malhotra) and the hon. Members for Penistone and Stocksbridge (Miriam Cates) and for Warrington South (Andy Carter), as well as the hon. Member for East Londonderry (Mr Campbell), who contributed previously. This is clearly an issue on which there is a lot of cross-party agreement. A lot of thought and consideration has gone into where we are currently. We need our economy to grow. Giving financial literacy to more people in our society, and everyone as they grow, will equip them to start new businesses, taking them from start to scale-up, to help to grow our economy and pay for the public services that we all need.

As things stand, too many young people are leaving school without these skills. A number of facts and figures have been given today, but the one that really jumped out at me is the OECD figure that an estimated 10 million people in the UK—a fifth of all adults—are financially illiterate. It is shocking and alarming. The UK ranks in the bottom half of OECD countries in financial literacy. We know that that has consequences not just for those individuals who potentially live in constant financial insecurity, but for our whole economy. Almost 13 million adults struggle to pay their bills—today—and more than half of adults do not have savings that could support them for three months if they lost their primary income. We know that life is becoming increasingly hard as we sit here, day by day, for families up and down the country. We know that the hardest hit people will be those whose budgets are the most stretched and for whom money does not go as far as it used to; they are the ones missing out most on financial education.

As we heard from the hon. Member for Broadland, financial education is patchy across the country, and many schools struggle to teach it. Far too many young people leave school without these skills for life. Only 8% of students cite school as their main source of financial education. A Bank of England survey in March found that almost two thirds of teachers cited a lack of dedicated time in the timetable for delivery. In personal, social, health and economic education, the economic too often drops off the end. That is storing up problems for the future.

Young people say that they want to be taught more life skills in school. The Centre for Social Justice conducted a survey, and four in five said that they worried about money. I hear that from schoolchildren when I visit schools in my local area. Two in three say that they have become more anxious about money as a result of covid. Three in four say that they want to learn more about money—and probably about more money—at school, yet Ofsted has found that there is a postcode lottery in the teaching of financial education and the most disadvantaged are missing out. It is not good enough, and it is storing up problems for the future.

A key part of the current financial literacy strategy comes from the mathematics curriculum, which is supposed to ensure that young people leave school with an understanding of personal financial management and the skills that they need for it. However, the Government have failed to recruit and retain teachers, meaning that one in 10 maths lessons in the past year have been taught by a non-expert. That means that the high standards we want for all our children are being delivered for only some of our children. It is not good enough, and it is storing up problems for the future. That is why the next Labour Government will urgently commission a full, expert-led review of the curriculum and assessment. We need a curriculum that is broad, rich, innovative and develops children’s knowledge and skills—a curriculum that ensures children leave school ready for life and builds on the knowledge, skills and attributes that they need to survive. Labour’s curriculum review will look to embed those skills in everyday learning.

Following Labour’s review of all state schools, including academies, they will be required to teach a core national curriculum, so that every parent knows the essentials of what their child will be taught: there will be a common national standard that gives parents and children certainty. Labour will ensure that children are taught those lessons properly. It means being taught by experts, not by overstretched teachers covering for their colleagues. We will do it by recruiting thousands of new teachers across the country and ensuring that all schools are properly staffed, that maths classes are taught by trained maths teachers and that teachers are given manageable workloads, no longer covering their own job and someone else’s.

Education is about opportunity. It is about opportunity for each of us—all of us—our whole lives long. It should enable us to develop the knowledge and skills to explore our interests and thrive throughout life. It is our duty and the Government’s duty to ensure that young people do not miss out on that opportunity. I hope that the Minister will outline what the Government are doing to ensure that every child leaves education financially literate and whether the Government will give parents the certainty of knowing that every school follows an agreed, shared national curriculum. I hope the Minister will reassure us that the Government are listening to the important contributions that have been made today and, again, I thank the hon. Member for Broadland for securing the debate.