/ Money, Parenting

We need compulsory personal finance education in schools

Young child with abacus and blackboard

We’ve been calling for compulsory personal finance education for a number of years. We want young people to manage their money confidently. And our survey results show it’s needed now more than ever.

The Which? quarterly consumer report has been set up to help us see where people’s living standards are improving or declining. And in the case of the younger generation, it’s the latter.

In our report, due out tomorrow, we found 18-29 year-olds are bearing the brunt of the current economic crisis. On average, each household in the UK is £5,000 in debt – owing 21p for every £1 they earn. It’s the worst for young people who owe 47p for every £1 they earn.

Sadly one in ten confirmed they were unable pay one of their bills in the past month and 45% said they always or often run out of money each month (compared with 38% of all consumers).

A long time coming

I’m a board member for the Personal Finance Educational Group (Pfeg) a finance education charity which offers help and advice to anyone teaching children and young people about money.

Pfeg, working with supporters from the financial services industry, consumer groups and educational specialists, has been instrumental in bringing the issue to those who can ring in the changes – the government. And a campaign led by Martin Lewis has shown the enormous support the public has for the issue as 118,862 individuals signed his petition to make financial education a compulsory part of the school curriculum.

Which? supports the mission because we want to ensure young people are financially capable to make informed choices with their money.

Economic education in schools

In November 2011, Pfeg made a submission to the government when it was reviewing personal, social, health and economic (PSHE) education. The charity argued that personal finance should be firmly embedded in any PSHE education programmes of study from 5 to 16.

We were delighted to see the All Party Parliamentary Group on Financial Education for Young People, recommend including financial education in the tuition of both maths and PSHE. Schools minister Nick Gibb is currently looking at the issue as part of the government’s curriculum review.

Mastering numeracy

Whether the responsibility lies with PSHE or maths tuition is an issue you’ve aired with us before. Phil thought we could do more to get the basics right:

‘No good trying to teach children how to handle their finances until they’ve mastered basic numeracy.’

And William said we need to learn to live within our means:

‘I think that it is essential that financial education should be taught in schools. [It’s] the principal reason that so many countries, as well as ourselves, are in the financial mess that we are in today.’

And MB wished they’d had classes at school:

‘As someone who has been useless with money all my life I wish I had had financial education at school, surely it is as important as any other subject and if learnt at young age, would hopefully become second nature by the time a child leaves school or starts work.’

Were you taught to manage your finances when you were at school? What part of the curriculum do you think could take on the challenge?


The very businesses that have been dishing out vast amounts of money with little or no checking, creating most of the problems and cuts we all face now, are now the same businesses (read: banks) that are going into schools alongside regulators, consumer groups and those incharge of our education system, telling us that we need to educate our children on financial matters!

In case Which? have forgotten, we, the taxpayers, have funded a bailout of RBS (to name but one) to the tune of £45 BILLION (currently sitting on a predicted loss of £25 BILLION for the taxpayer that we will never get back).
According to the regulator, the Financial Services Authority, their report into RBS near collapse (printed only under duress when the parliamentary select committee ordered it to do so) revealed substantial failings in the inspection and light touch lack of regulation caused them to over stretch their borrowings and growth on the back of cheap borrowing.
The regulation at fault came from the Hampton report in March 2005, which consulted only “stakeholders” ie, businesses and banks themselves.
Banks influenced the regulation that failed and caused one of the biggest financial catastrophes in history.

“PFEG, working with supporters from the financial services industry”
Is a campaign coming (with self proclaimed expert in saving money) from Which? to let those in the financial industry into schools to educate our children?
Barclays, a bank that has admitted telling lies in the setting of the Libor, is already “giving advice” to teenagers on how to handle their finances!

Is it any wonder that no banks are prosecuted, no banks have their consumer credit license removed, no bank has even lost it’s “compliant” status (and all the light regulation benefits that come with it) with the FSA, when consumer groups are “working with” the very businesses/regulators that have failed the people.

The idea that financial organisations that have taken money from taxation (cuts to benefits and services and increased taxation for my family) to pay for their own lack of financial knowledge, will now be going into schools alongside consumer groups and a financial journalist, to educate my children on financial management is an insult.

Which? and consumer focus are getting too close to regulators and business.


Sorry – I used to teach personal finance (AKA budgeting) to our non exam children at my slum school – I could not teach it to the exam children because of timetable constraints – until Thatcher decided to dictate what I could actually teach via The National Curriculum.- This did NOT include personal finance to anyone. I had to teach exactly what Thatcher dictated – and OFSTED “inspected”. So please blame Government for the failure.

It would also help if teachers were not universally denigrated by those who don’t teach particularly Tory governments. During my 35 years of teaching in a slum school the number of Maths graduates teaching there was exactly TWO – because of poor pay and atrocious conditions – When Thatcher arrived – Maths and Science teachers left in droves why? Because there was far better working conditions and pay elsewhere. An English graduate for instance had far less chance of a worthwhile job in industry so English graduates were always well represented in all schools whereas there were always well paid Industrial vacancies for Maths and Science. – Science teachers IME were predominantly Biology Specialists. Interestingly I wanted to read Entomology and had an “intern-ship” with the British Natural History Museum until I found I would need a PhD before I was allowed to identify British Lepidoptera for visitors – So I turned to Physics then to Mathematics..

Before Thatcher there were actually useful jobs for the less academically inclined – Sadly She sold Britain off to her Tory Chummies and now we don’t have useful jobs even for graduates. Not to mention a £40,000 life time debt for the “privilege” of Studying.

frances says:
24 July 2012

I’m inclined to agree with ‘frugal ways’

If the incumbents are let loose in the classroom
all it will do is ensure the present mayhem continues on into the future.
Perhaps that’s the idea.

Nobody should teach children about money until they know what it is.
Richard Duncan says “it shouldn’t be made out of paper.” When the question
was put to Alan Greenspan he said “I don’t know. But we’re working on it.”
Others say our present system of issuing money as debt is nothing short of racketeering.

The tale of “Joseph’s Cent” is impressive.
1 cent invested in the year 0 at 5% interest compounded will be worth
500 billion balls of gold the weight of the Earth in the year 2000.
The student will be pleased to have got his sums right, and even more delighted
with the idea of receiving such a dividend. All you have to do is stick around.
But there’s another side to this coin. Who pays ?

An open minded, well informed teacher (Margrit Kennedy, Ellen Brown, plenty more)
could do wonders. But a syllabus based on promoting our current ideas of finance
would be a waste of time.


Thanks for sharing your comments. Just to clarify for frugal ways and frances – the idea of Pfeg is to equip teachers with the skills and materials to teach personal finance education to students themselves.


As I said on twitter, the idea/aim is fine, but is it achievable?

Who will carry out and educate the teachers so they can teach our children?
Can you honestly say that the banking industry will have no input?
I don’t believe you can…. not only have they totally messed up the current financial climate, they have shaped regulation to benefit their own profit margins, they are in effect, exempt from the law regarding penalty bank charges, they have been caught out lying by regulators outside of the EU, otherwise they would have gotten away with it?
The scale of mis-selling their own products is mind numbing!

If anything the financial industry and their colleagues (and they are colleagues – Philip Hampton who set the ball rolling with the Hampton report into light touch regulation, is now head of RBS if memory serves me right?) who sit in regulation, have given us all a lesson in how NOT to manage money and financial products.
I would go further still, if my child was to be taught how to manage their money in school, I would remove my child from that lesson.

The financial industry cannot be trusted – examples and subject matter are plentiful enough for a three year course at least.
Pfeg, working with supporters from the financial services industry, consumer groups
Pfeg are marketing banks as “supporters from the financial industry” – they cannot even be honest enough to call them banks!
I am very concerned also about consumer groups involvement, in light of the Which? complaint to OFCOM over the Three raising prices issue, in that Which? say it is acceptable to pay “early termination fees” to mobile phone providers in some circumstances – despite these being penalty charges and unenforceable under common law and never having been tested in a high court in England & Wales, same goes for Which? silence on unenforceable bank charges, etc.
When the self proclaimed saving money expert is mentioned, that throws any credibility out of the window for me.

The best way to educate our children in financial management is to look around and show them examples of how good financial management is rewarded and the benefits of it…. in today’s world, examples of this are few and far between!

frances says:
24 July 2012

Hello Charlotte,

Margrit Kennedy has said :-

“In the late seventies, environmentalists were among the first to question
why economic reasoning demanded exponential growth returns that the planet
could never sustain. We discovered that there was a severe lack of understanding
of the basic facts about money amongst laymen as well as professional economists.
Remarkably little research had been devoted to the questions of money creation and functioning.

Up to this day, it remains almost taboo to discuss it, both for economists and governments,
as if the global monetary system was a fundemental given.
However, nothing could be further from the truth.”

If we are running a money system that is designed to ruin itself,
we should not tacitly teach it in the schools under the heading of
managing mortgages, credit cards, running a bank account, etc.
as if “the monetary system was a fundemental given.”

I take your point about Bob Diamond & Co. not actually being in the classroom.
But if their ideas are promoted there, we’re not going to improve much.


Some information worthy of consideration?

“High-street banks have proven that they can’t be trusted to give appropriate investment advice…. the odds of customers being sold an unsuitable product or investment bond are unacceptably high Quote from Which? money 7/3/2011
Which? are providing “core funding” to Pfeg, alongside the Royal Bank of Scotland group and the British Bankers Association (representing all high street banks). Barclays are funding Pfeg funding forum events. Contradiction? Are they “independant” enough to educate teachers and children?

In September 2009, the Department for Children, Schools and Families (DCSF) said, “financial education is a cornerstone of PSHE” at the same time as Pfeg were over halfway through their £15 million FSA (read: taxpayer) funded, FSA’s national strategy capability program for schools – then listed a PSHE framework in which “credit” didn’t get a single mention!
At this time the government-funded Personal Finance Education Group (Pfeg) suggested bringing in ‘volunteers’ from HSBC for financial education lessons in primary schools.
The Labour proposal discussion on credit management and personal finance being added to the national curriculum continued…
“…is employing the banks to teach kids about money a bit like getting Playboy to teach them about sex?”

I particularly noted the end piece, “Increasing and improving the provision of financial education would be a vote-winner as well as a powerful weapon against poverty: according to a YouGov poll for Insight Investment, 87 per cent of people felt financial literacy should be introduced as a compulsory topic to the school curriculum”
Polls and surveys, published years before the self proclaimed saving money expert’s epetition, showed a clear majority of the public in favour of some form of financial education, this was hardly a “campaign led by….” I’d wager good money that with the increased troubles for families with their finances, the popularity of this view would have increased.

“Make financial education compulsory; make it independent of the banks, and of anyone else who has an interest in getting young people into debt; and make it relevant to young people’s lives. Teach them about their rights when they sign a credit agreement. Teach them that no matter how many times the bank calls them, they need to pay their rent before they pay their credit card bill. Teach them about bailiffs.”

I’d go further and question would unenforceable bank charges be included in education?
Would a BBA funded body as the Pfeg is, advise teaching to take out small claims court action to recover their money or gain recompense for mis-selling PPI and other products?

The Financial Services Authority (FSA) was concerned with saving money in 2005 – the report led directly to the light touch, non inspection regulation that caused the near collapse of RBS – yet in 2006 it gave Pfeg £15 Million over 5 years (2006-2011) to implement the schools strand of it’s “National strategy for financial capability” across secondary schools.(Pfeg’s “learning money matters” intiative)
This was taxpayer funded during a time when the FSA were ignoring the RBS expansion which collapsed in chaos and had to be bailed out with £45 Billion of taxpayer’s money – as well as the run on Northern rock, which required emergency funding from the Bank of England, the FSA and the Treasury.
The DCSF were also funding Pfeg to the tune of £10 million from 2008 to 2011, for the “My money” educational programme (a key part of the financial capability action plan, launched by the Treasury and the FSA) that Pfeg and their partners implemented.

Then we have the Pfeg “What money means” project, supported by HSBC, designed to “change the way personal finance is taught in primary schools.”
This involved HSBC staff, “…supporting their local primary schools by adding value IN the classroom”
Haven’t HSBC top brass today apologised for money laundering?

Banks and a consumer group (Which?) are funding Pfeg in their aims of compulsary financial education from primary to leaving school.
Banks, government and the regulator (The FSA) have all funded Pfeg during the time when the UK has seen the biggest economic crash since the 1930’s depression.

Pfeg and Which? want me to support compulsary financial education for my child, which would involve financial industry staff training teachers and very possibly having bank staff going into classrooms, to teach my child about financial management?


BBC post this morning, that RBS, HSBC and JP Morgan are “still under investigation in the US, UK and Asia in connection with the rate-fixing scandal”

Barclays have admitted attempting to fix Libor rates and been fined already.
All these businesses give funding in some way to Pfeg to discuss educating or educate in our schools.

frances says:
25 July 2012

Thankyou ‘frugal ways’

I’m very disappointed in “Which”.
As for the rest – it comes as no surprise.

“It is well enough that people of the nation
do not understand our banking and monetary system,
for if they did, I believe there would be a revolution before tomorrow morning.”

(Henry Ford)

Independent Adviser says:
26 July 2012

I’m not certain about the delivery, but I understand the industry funded the founding of Pfeg including a levy to financial advisers (FSA fees) i.e. me.
I believe its a start to solving a genuine need in this countries educational demands/deficit.
I’m not saying as an industry professional I fully support the programme, but its far too early to tell whether it will improve children’s understanding long term.
In this modern world, they need to understand APR, compound interest, tax (basic), and some understanding of risk.
If it means kids don’t take out risky products that they don’t understand, insurance policies they don’t need, or ridiculous headline rates of interest but only when you pay in x for y months and the rate only applies to the first y pounds and its z thereafter or you get 0.1% I will be happy.
The misselling costs time and anguish, loses faith by consumers, and the rest of us pay the compensation (FSCS) as its funded by the advisers that remain.

If you have children in a secondary school and you aren’t happy with what’s happening, then please direct all your resources and efforts to working with your school.
Get on a parents committee, work with a quality independent financial adviser (soon to be renamed), and put together a programme you care about or ask for directed attention to certain areas.
The more involved we all are the better, as its the countries parents that will determine what government and schools do. Apparently, there is a rumour that schools must treat us as ‘customers’ so why not exploit this for good for a change.

Good luck!


The FSA’s report into banks selling packaged accounts – accounts with insurance for example – 1 in 5 of us have now – shows that banks haven’t been checking that the account customer is able to claim on the insurance they are paying for.
The FSA haven’t even checked the banks on this until this report and now they say they will act, but not until March 2013 – when they won’t exist?

The Pfeg have received millions in funding on past projects from the inept FSA, who I would say, have been implicit in the financial sector’s blatent disregard for the public, regulation and laws, at a time when custom was being diverted to the banks on the orders of the government.

In other news, Barclays, another contributor to Pfeg, is being investigated again.

Are financial institutions fit to be pulling the strings of financial training for teachers and in turn, our children?