Lord Lee: My own plan for fixing financial literacy
Virtually everyone agrees that there is and has been a near total failure to teach young people about the world of finance, investment, mortgages, etc. in schools. Politicians of all persuasion have failed lamentably in this area.
It is truly appalling that many young people are now more likely to speculate in cryptocurrencies than invest traditionally. For my own part, I have participated and supported a number of investment competitions for school children over the years.
There are two particular initiatives that I personally have taken. Firstly, I, supported by a number of senior Conservative Peers, wrote to Jeremy Hunt when he was Chancellor, advocating that £5,000 of the Government’s holding of NatWest shares should be gifted free to every state secondary school if they wished to receive them.
The condition was they should be held for the long term, and that the senior pupils should decide for themselves how the approximate £350 per year dividend should be spent. It could be on something for the school, a local charity or perhaps reinvested. With 4,000 state secondary schools, full take up would have only cost the Government around £20m maximum – a drop in the ocean in terms of state expenditure.
The idea was to be seriously examined by Treasury Officials, but unfortunately the General Election intervened.
In my view, this was a unique opportunity given that the Government’s NatWest holding or an equivalent will probably never arise again and it would have been transformative, giving school children for the first time an awareness of shares, banks and dividends.
Secondly, I have written a very short, easy to read book entitled ‘Yummi Yoghurt – a first taste of stock market investment’ for young people and novice investors. This is told through a very simple story but gets across the basics of investment.
Finally, for two of my grandchildren I have taken out junior ISAs, via their parents. In discussion with them, then aged nine and seven, we bought shares in companies which they could ‘touch’ and identify with e.g. Tesco, Marks and Spencer, Greggs, Hollywood Bowl, and Bloomsbury (the Publishers of Harry Potter).
Then, the younger grandson said he wanted to buy Standard Charter Bank, which rocked me somewhat! “Why?” I asked. “Because they sponsor Liverpool” was his response. Of course, I acceded to his request.