I AM sure that you and I have at least one thing in common: that one of the most useful skills in our lives is being able to manage money – making sure I live within my means, don’t run up excessive debts, can pay my mortgage, can make sure my savings earn interest, and that my pension is not eaten up by fees. Not having that skill can lead not just to being worse off, but to financial ruin. As debt advice charities see every day, the lack of financial capability can devastate lives. In recent years, runaway personal debt has caused problems for individuals and the economy.
But although it is one of my most important life skills, I was never taught it at school. Schools should equip children with both intellectual learning and skills for life outside the school gates. And one of the most important and practical skills throughout life is the ability to manage money.
That is why in all last week’s hoopla about changes to GCSEs, there was one barely-noticed announcement that particularly pleased me. Michael Gove, the education secretary, had decided to include financial education in the national curriculum, making it a legal requirement for schools to teach it. It is something the British Bankers’ Association had been urging the government to do.
Financial education helps people balance their finances, avoid costly debt, save for their future and better understand their investments. It empowers customers, giving them the confidence that they are getting the best deal from financial services companies. Unlike many of the skills taught in school, financial education benefits everyone throughout their whole lives. And the lack of it can be personally disastrous.
For all these reasons, we have backed the Personal Finance Education Group (Pfeg) in its campaign to ensure that every child and young person has the skills, knowledge and confidence to manage their money well. Until now, there have only been guidelines in place for four to16 year-olds to learn about financial education. For primary schools, the guidelines recommend that pupils are taught to look after their money and realise that future wants and needs may be met through savings. That is good as far as it goes – but it is only by including personal finance in the curriculum that we can be sure that every school equips every child with the skills they need.
British banks are already active in financial education, with many running their own schemes. A number also support the work carried out in schools by Pfeg, which trains teachers in financial education. The industry works with Pfeg’s Quality Mark accreditation scheme, ensuring that young people in receipt of financial education programmes, or education resources produced by financial firms, are not being exposed to marketing.
We now need to ensure that schools can deliver the necessary teaching. At a time when the need for financial education has never been clearer, the banking industry is keen to work with the government to deliver its new commitment.
Anthony Browne is chief executive of the British Bankers’ Association.