Curriculum and policy
Financial capability - what is it?
Financial capability is the ability to manage your finances and to become a questioning and informed consumer of financial services. It is needed throughout life as we develop not only awareness and understanding of money matters, but also the skills, critical judgement and resolve to manage them.
In the 21st century people are faced with increasingly complex financial decisions. Meeting university costs or living comfortably in retirement are now more dependent on individual financial decisions than when state grants or a basic pension were available.
Young people face particular challenges. Consumer opportunity and choice compete with the need to plan ahead. A longer, less secure working life brings with it the need to plan for periods of learning to improve or adapt knowledge and skills. It may be difficult to recognise, as a young adult, that financial decisions made early in life can have significant consequences for future economic wellbeing.
Financial capability is therefore important for everyone if they are to make the best of the opportunities and challenges presented throughout life.
Financial capability is now directly addressed by government policy. The 2007 document Financial Capability: the Government’s Long-Term Approach states that all young people should have “access to a planned and coherent programme of personal finance education, so that they leave school with the skills and confidence to manage their money well”. This has been followed in 2008 with a joint action plan from HM Treasury and the FSA outlining measure that will be taken to bring this about in schools.
Personal finance education - what is it?
Personal finance education is a planned programme of learning opportunities and experiences designed to increase the financial capability of all pupils from every social and cultural background.
Its aims are to enable young people to develop:
- knowledge and understanding to inform judgments and decisions about managing money in their present and future lives
- appropriate attitudes reflected in taking personal responsibility for money management, questioning the claims of some financial products and evaluating available information before taking financial decisions
- financial skills demonstrated through day-to-day money management and planning for future financial needs, such as budgeting for weekly household items, monitoring bank accounts and credit cards and checking whether savings and investments are meeting financial goals.
Personal finance education should permeate the entire curriculum and extend beyond the school walls into everyday life.
The whole school curriculum includes all the planned learning experiences in the school and beyond so that learning outside the classroom takes on a new importance. This is particularly significant for personal finance education in which real life experiences both in and outside school enrich and provide relevance for learning.
Pupils' backgrounds and needs
By involving pupils themselves in identifying their current understanding of financial issues and future learning needs, personal finance education becomes directly relevant to their lives.
The curriculum must:
- provide relevant, challenging and engaging learning opportunities for all pupils
- link learning to life outside school
- make connections between different subjects in the curriculum.
At the start of the planning process, school staff should consider the nature of the school community and the needs and backgrounds of its pupils. Local data will provide relevant information about issues such as:
- employment
- levels of personal debt
- housing
- teenage pregnancy.
School data will provide more detailed information about the pupils themselves.
Being inclusive
Each school's curriculum, including that for financial capability, should provide high-quality teaching and learning experiences for all pupils irrespective of social background, culture, race, gender, or degree of ability. The specific needs of pupils from overseas and those who are in care should also be included.
Differences in background and experience will affect pupils' experience of money and finance and the circumstances in which they will develop their financial capability. By identifying pupils' needs it becomes easier to plan appropriate learning experiences that:
- set suitable learning challenges for all pupils
- respond to their diverse needs and backgrounds
- overcome potential barriers to learning.
Listening to pupils
The voice of the pupils themselves is important in this process and there should be opportunities for them to demonstrate existing knowledge, skills and understanding and identify areas of specific interest and concern.
Teachers are encouraged to read the guidance on inclusion from the Qualifications and Curriculum Development Agency and the National Curriculum online statutory inclusion statement.
So, how do we organise personal finance education?
Because the new secondary curriculum encourages each school to design its own curriculum, provision for personal finance education will vary from school to school. It should focus on the entire planned learning experience including lessons, events, the routines of the school, the extended school day and out of school activities. Planned and coordinated personal finance education provision may, therefore, include activities in all or most of the following:
- specific lessons with separate curriculum time as part of a PSHE education programme
- explicit, planned content in other curriculum subjects, for example mathematics or citizenship
- learning opportunities across the curriculum, for example discussing money matters presented in literature, discussing foreign currency in modern foreign languages
- whole school and extended timetable activities, for example a ‘money challenge’ day or enterprise week to enrich (but not replace) the overall programme
- specific projects, for example a mini enterprise project (Learn about how and why businesses operate)
- learning through involvement in the life of the school and wider community, for example managing a budget for the student council, school play or a community initiative
- managing money during residential experiences, including overseas
- learning about finances through work experience and work shadowing (Recognise, develop and apply their skills for enterprise and employability)
- Learn more about personal or business finance from contact with an external contributor (Learn from contact with people who work).
References in brackets refer to the new Framework for Economic wellbeing 11–19: career, work-related learning and enterprise, Qualifications and Curriculum Authority (now QCDA), 2008.
