Financial Education

Jim Shannon Excerpts

Thursday 6th February 2025 Commons Chamber

[Rebecca Paul (Reigate) (Con)]

I warmly congratulate my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) on securing this important debate, and I commend him for his sustained efforts to drive up the quality and availability of financial education offered to our young people. There is sometimes a tendency in this House—perhaps an understandable one—to gravitate towards short-termism. It is therefore a sincere pleasure to follow my hon. Friend, who, along with his colleagues in the all-party parliamentary group on financial education for young people, has been doing such excellent work to promote reforms that take a longer view and are geared towards boosting the life chances of future generations.

Good financial education, delivered not only by schools, but by parents and families and within communities, has the potential to produce a generation wise to the dangers of credit card debt, alert to the practices of predatory payday lenders, and confident in their ability to open a bank account and budget appropriately. I believe that all of us in this place are truly committed to reducing inequality and ensuring that everyone has the best possible start in life, and I can think of few better ideas than ensuring that all young people enter adulthood with a sound grasp of how to manage their money.

The British public seem to share that assessment. A research survey of UK adults conducted by Santander revealed that a full 70% felt that better financial education in their younger years would have improved their ability to manage their finances through the ongoing cost of living crisis. Meanwhile, two thirds of young people believe that a lack of financial education has played a role in them amassing the debts that they hold.

Indeed, it is not just adults but children who are deeply concerned about financial matters. The London Institute of Banking and Finance reported in 2023 that 68% of children worry about money and their personal finances. That figure is hardly surprising when we consider that today’s children are the most digitally exposed in history; they face a constant barrage of offers to spend money in alluring but wasteful ways. Many of the apps downloaded on to the phones that our children spend so much time on are full of shining icons, inviting them to spend real-world money, with the tap of a finger, in exchange for worthless in-game currencies. Young players of online games are prompted to spend, in some cases, hundreds of pounds on loot boxes or so-called cosmetic items—that is, a virtual in-game weapon, or an outfit that is a slightly different colour from the default option. Financial literacy is clearly a skill that our children and young people need, to protect them and prepare them for the future.

Although there is undoubtedly still work to be done, I briefly draw the House’s attention to the solid foundations laid by successive Conservative Governments over the past 14 years. After all, the Conservatives left England as one of the top-performing countries in education. Under the Conservative Government, children in England were named the best in the west for reading, and were ranked best at maths in the western world in the 2023 TIMSS—trends in international mathematics and science study. It was a Conservative Government who created the national network of 40 maths hubs to support schools in improving their mathematics teaching. That network is a partnership between schools, colleges and other organisations that work together to provide support for maths teaching in their regions. The positive impact of those hubs on young people’s ability to manage and understand money and finance is obvious. We were clear that we intended to go further: at the last election, we set out a comprehensive plan to ensure that every child studied maths to the age of 18, so that they would leave school with good numeracy skills. That would help them to navigate their finances with confidence.

That is not to suggest that the entire burden of providing robust financial education can or should fall upon our schools. As is so often the case, families also have a central role to play in ensuring that children are imbued with good financial common sense. That does not need to be overly complex; simple measures, such as offering children small amounts of weekly pocket money, can help to normalise good habits such as saving and thinking carefully before making purchases. According to an ING survey of 12,000 parents across Europe, giving children pocket money reduces the risk of them getting into debt as adults.

[Jim Shannon (Strangford) (DUP)]

I am a great example of that. Whenever I was 16, my mum took me down to Northern Bank, as it was then, gave me £10—I could have bought a second-hand car for that in those days—and told me to put it in my bank account. Does the hon. Lady agree that if everybody had a mother like mine, they would be a lot better off?

[Rebecca Paul]

I thank the hon. Member for that great contribution to the debate. I agree that all those small things add up and make a difference to our financial literacy. I am a chartered accountant, but that is not what made me financially literate; it was the lessons I was taught by my family, and the jobs that I did when I was young. Members have given great examples of how they came to understand finance. In an increasingly contactless world, it is important that children and young people physically see and feel cash. That is the way in which value is tangibly understood.

To return to schools, financial education is not, as has been noted, a statutory part of the national curriculum in primary schools in England, but in contrast, in Wales, Scotland and Northern Ireland, it is very much embedded at primary level. Given the way in which our children are relentlessly pressured to spend money that they may not even have, and in the light of Cambridge University research suggesting that habits and attitudes towards money are formed by the age of seven, there is much logic to the argument that financial education—whether delivered by schools, parents or even community hubs and other organisations—should not wait for the later years, and should be continuous.

Teachers also feel that starting good financial education early is important for the future wellbeing of young people. According to a 2020 survey, 82% of primary teachers consider teaching financial education to be very important. We may hear more about that when the Francis review of the national curriculum is complete. I urge the Minister to answer the question that my hon. Friend the Member for Broadland and Fakenham asked about the Government’s plans for the curriculum.

In secondary schools, the picture is somewhat different. In 2014, the then Conservative Government acted to ensure that financial education was placed on a statutory footing in local authority schools. However, the all-party parliamentary group on financial education for young people—which I once again praise as an outstanding example of everything an APPG should aspire to be—noted in its 2023 “Building Beyond Barriers” report that over half of teachers did not know that financial education was part of the curriculum at all. That is a matter of some concern.

It is certainly important that the topic of financial education is addressed in the classroom in an appropriate way. I have no doubt that our hard-working teachers are keen to play their part in delivering that content. The same report found that three in four teachers believed that they should play a leading role in imparting financial skills to children. The obstacles were reported to be inadequate training, limited funding and an understandable feeling that there is simply not sufficient time in the school year to deliver those lessons. In government, the Conservatives sought to mitigate the funding issue with an investment of over £1 million to embed and scale teacher training in financial education.

The Money and Pensions Service did excellent work developing and testing approaches to supporting teachers, and practitioners working with children and young people in vulnerable circumstances, to deliver financial education. Ultimately, though, we must acknowledge that the school timetable is already under intense pressure, and there are many competing calls on limited time. That is why I would argue that the good financial education that every child deserves is best delivered not only in schools, but in the family setting, in communities, and with the help of valuable resources.

I conclude with a simple message, which I hope underscores some of the excellent contributions that we have heard today: financial education is invaluable and transforms life outcomes. Research undertaken by Compare the Market tells us that today, just two fifths of young adults rank as financially literate. We can and must do better. Conservative Members will keep these matters under careful review, and I hope that the Minister will address the questions that have been raised. Once again, I thank all those who have spoken, and in particular my hon. Friend the Member for Broadland and Fakenham.