Young Money comments on the government’s response to the Lords Select Committee on Financial Exclusion

 

Young Money (formerly pfeg) welcomes the government’s response to the Lords Select Committee on Financial Exclusion but believes the government can do more to ensure young people develop the skills, knowledge and confidence required to successfully manage their money.

 

The government rightly places emphasis upon the upcoming consultation on statutory PSHE. Statutory PSHE with a strong ‘E’ for economic strand is an appropriate place to teach financial education, in both primary and secondary schools, as it includes the ‘personal’ aspects of financial education such as attitudes to money and budgeting. Compulsory PSHE would mean, crucially, that students have early access to financial education from primary school age, as recommended in the landmark report from the APPG on Financial Education for Young People.  Young Money is looking forward to being closely involved in the government’s engagement work that will inform the PSHE consultation.

 

Young Money also welcomes the government reaffirming its intention for the new financial guidance body, which will replace the Money Advice Service, to co-ordinate funders and providers of financial education and assess the most effective efforts to improve financial capability. Young Money hopes that these aspects remain intact as the bill goes through Parliament. The creation of a Financial Inclusion Policy Board is another welcome development which should assist cross-departmental working and appropriate policy development.

 

Young Money believes, however, that there is more that the government can do to ensure all young people receive high quality financial education. For example, the Department for Education must update its guidance for schools on the role of financial education in the curriculum. This guidance has not been updated since 2008, despite major changes to the curriculum in relation to financial education. The government should also agree to take part in the OECD’s Financial Literacy assessment in 2021, to provide an international benchmark to improve upon.

 

  Martin Lewis OBE, founder and chair of MoneySavingExpert.com said:

“We campaigned hard for financial education to join the national curriculum, and succeeded in September 2014.  Yet it was a pyrrhic victory. The government put no resources in to schools or to training teachers – so while there are some beacons of excellence many schools are struggling to do it or do it well.

 

“We live in one of the world’s most competitive consumer economies.  Firms spend billions on marketing, advertising and teaching their staff to sell.  Yet consumers get no buyers training. The state needs to do more.”

 
Michael Mercieca, chief executive of Young Money said:

“I am very pleased that the government’s response recognised and praised the work of Young Money and other financial education charities and organisations. However, more action needs to be taken to avoid the next generation sleepwalking into a major youth debt crisis because of a lack of knowledge on how to make sound financial decisions.”

 

 Julian Knight MP, Chair of the APPG on Financial Education for Young People said:

“I was delighted when the Lords Select Committee on Financial Exclusion endorsed the recommendations of the APPG on Financial Education for Young People’s most recent report. I welcome the government’s response and their decision to consult on making PSHE statutory in primary and secondary schools. PSHE should of course include financial education as part of the ‘Economic’ strand, this would crucially ensure that students have access to financial education from an early age.  There remains however more to be done policy wise to ensure that young people leave schools financially capable.”