Renewed calls for statutory financial education in primary schools

Oct 10, 2023 4:22:37 PM
Financial education should be a statutory part of key stages 1 and 2 PSHE education according to actions announced by the Lord Mayor of London this week as part of a six-point plan to improve financial literacy, inclusion and numeracy.

Elected annually, the Lord Mayor of the City of London is an international ambassador for the UK's financial and professional services sector. Current Lord Mayor, Nicholas Lyons, has driven forward efforts to improve financial literacy and inclusion through an inaugural Financial Literacy and Inclusion Summit and formation of a Steering Group of industry leaders, financial institutions and those of us involved in financial education.

The six recommended actions by the Lord Mayor and this Steering Group include emphasis on improving numeracy alongside ensuring all pupils can benefit from financial education aspects of the personal, social, health and economic (PSHE) curriculum. ‘Action 5’ calls on the government to:

Ensure that every child and young person in England has the knowledge and skills to understand financial information and make effective financial decisions by making financial education statutory in England in the PSHE curriculum at key stage 1 and key stage 2.

Access to financial education is currently only guaranteed at key stages 1 and 2 in independent schools (where all of PSHE education is compulsory, not just relationships and health aspects). This is despite UCL study findings that financial skills of 15-year-olds from socio-economically disadvantaged backgrounds are four years behind those from advantaged backgrounds, and that they are less likely to learn about money in school or discuss it with their parents.

Welcoming the recommendations, Jenny Barksfield, PSHE Association Deputy Chief Executive & Director of Education, said:

Too many pupils – and especially those from disadvantaged backgrounds – miss out on learning about budgeting, saving and on developing an entrepreneurial perspective, and lack the financial literacy to avoid online fraud and other increasingly complex financial harms. Making financial education a statutory part of PSHE education from key stage 1 would guarantee access for all pupils, not just the lucky few.

This isn't about adding anything to the curriculum, but providing universal access to what some primary schools are already doing well through the current non-statutory PSHE education framework. Of course, increasing numeracy is crucial, but it must be accompanied by robust PSHE education content from an early age”.

The Education Secretary can make financial education a statutory part of PSHE education at key stages 1 and 2 using existing powers within section 35 of the Children and Social Work Act . Taking this action would likely be popular with pupils, parents and schools. The Children's Comissioner's Big Ask survey results  showed that pupils are much less likely to report learning about finance despite finding economic wellbeing one of the most helpful aspects of PSHE education.

Money & Pensions Services research shows that financial behaviour starts to be shaped between the ages of three and seven, and long-term financial outcomes can be predicted from skills and behaviour in children as young as five. This stresses the need to begin this education early. According to Jenny Barksfield “Children must therefore develop a fundamental understanding in primary phase, that builds through a well- sequenced PSHE education curriculum as they progress through their education”.

The six-point plan shaped by the Steering Group considers both private sector and Government measures to improve financial literacy, inclusion and numeracy.   The Steering Group members include the City of London Corporation, National Numeracy, Fair4All Finance, The Financial Inclusion Commission, PSHE Association, Plain Numbers and the Financial Times Financial Literacy and Inclusion Campaign.  

Nicholas Lyons, the Lord Mayor of the City of London, said:

“This six-point plan outlines how the private sector, regulators and Government can collaborate to address financial inclusion and illiteracy from the youngest age upward to create a more resilient and equal society that equips and empowers people to make effective financial decisions.”