Financial Education

Louise Jones Excerpts

Thursday 6th February 2025 Commons Chamber

[Louise Jones (North East Derbyshire) (Lab)]

I thank the hon. Member for Broadland and Fakenham (Jerome Mayhew) for his obvious passion for the subject.

In October 2023, National Trading Standards released research showing that 73% of UK adults have been targeted by scams, and just over a third of those lost money as a result. The Government are cracking down on online crime and fraud, but clearly one other long-term solution is to make sure that everybody is financially educated and financially literate. If we educate our children and young people to be more confident with how and why they manage their money, over time they will be less susceptible to those frauds and scams, which, sadly, can only grow with the development of artificial intelligence.

As we have already heard, many young people form their money habits at a very young age, as young as seven or eight. I remember my parents teaching me the importance of saving, giving me a little savings book and making sure that every week I put away some of the £3.50 that I earned from my job delivering newspapers. Unfortunately, as we have also heard, parents who have not managed to acquire financial literacy sometimes pass on bad habits to their children, and up to a third of British workers live from pay cheque to pay cheque. I fear that we are not doing enough to help parents and young people to break that cycle. I am shocked to hear people working in food banks say that many users of their services would benefit hugely from financial education and literacy, and even some simple advice on how to draw up a budget and understand how to make sure they will have enough money when the bills are being sent out. Even simple things can make a huge difference so that people do not have to end up relying on food banks.

With the future as yet unknown, pupils entering secondary school this September will finish their GCSEs in June 2030 and their A-levels in 2032. If they decide to go on to university, they might graduate in 2035. I think it safe to say that, while we do not know for sure what opportunities will be available to them—things may well look very different from the way they look now—good financial education and literacy will stand them in good stead. Financial literacy education has previously been added to the national curriculum, but more must be done to ensure that children are taught the subject.

Financial education must have breadth, teaching students not only how to budget and all the good stuff like simple versus compound interest, but enabling them to understand the importance of saving for a pension, and to recognise an investment scheme that is protected by the Financial Conduct Authority, for instance, so that they can avoid some of the more “sparkling” deals online. The good news is that those who have received a financial education and remember it are more likely to save, feel confident about money and use a bank account. That shows that when effort is put in, it does indeed reap rewards.

The need for financial education is clear to everyone in the House and beyond. It is not a luxury but a necessity. I well remember being taught in depth about trigonometry, and I have to say that I wish I had been taught about pensions instead.