The EBEA is a member of the Financial Education Forum as part of its advocacy role. The Forum comprises a wide range of organisations with an interest in financial education, including banks, insurance companies and educational bodies, such as Young Enterprise and ourselves. The Forum is coordinated by Young Enterprise, which amalgamated with the Personal Finance Education Group (PFEG) a couple of years ago and which has recently re-branded as Young Money. The Forum meets twice a year and the news items below arise from the latest meeting, which was held on 16 October 2017.
- Government support for financial education is coordinated through its new Money Advice Service (MAS) – a single body covering advice and help on pensions, debt, financial services etc (www.moneyadviceservice.org.uk). Kirsty Bowman-Vaughan, financial education lead at MAS, drew attention to a survey they are carrying out on financial literacy in 1000 schools. The survey will initially seek to identify the most important determinants of financial capability amongst young people. Initial results of the needs analysis should be available in Spring 2018.
- Julian Knight MP, chair of the All Party Parliamentary Group (APPG) on financial education , is pushing for the UK to take part in the PISA assessments on financial literacy from 2021 (see below). He also argued for a coordinated approach to financial education, starting in primary schools. EBEA, while supporting the case for starting financial education early, made the point that there was also a strong case for support in the later years of compulsory education and for the 16-18 age group where Ofsted evidence indicates there are major deficiencies in students’ understanding of financial issues just when they need it most and when it becomes even more relevant.
- Michael Mercieca, CEO of Young Enterprise, emphasised the importance of the ‘E’ in Personal, Social, Health and Economic (PSHE) education in the call for it to become statutory in all schools, which is supported by the APPG on financial education. The matter is to be discussed by government in March 2018. The EBEA supports the case for PSHE becoming a statutory part of the curriculum in all schools (not just local authority schools) but emphasises that the economic component of PSHE is much broader than just personal finance and that if it becomes statutory it will require additional resources, including the training of teachers. It will also need to be included in the Ofsted inspection framework, otherwise there is a danger that it will be ignored by many schools as they will not view it as a priority amongst many conflicting demands on curriculum time and staffing resources.
- The OECD’s Programme of International Student Assessments (PISA) has recently published a very detailed analysis of its 2015 assessment of students’ financial capability. The assessments were taken by 15 year olds in 15 countries or economic areas. Although the UK takes part in the PISA science, numeracy and reading assessments it has chosen not to participate in the financial capability assessment, which is conducted every three years. The OECD identifies financial capability as ‘an essential life skill’. The assessments reveal very wide variations in financial capability both between the participating countries and within the countries themselves. 22% of students who took the assessments scored below what the OECD regards as the base line performance. The top performing countries/economic areas (in order) were Chinese states (including Shanghai), Flemish Belgium, Canadian Provinces, the Russian Federation, the Netherlands and Australia.
- Strong performance in the PISA financial capability assessment was associated with students’ competence in numeracy and reading, social class, the extent to which they discussed financial matters with their parents and whether or not they had direct experience of managing money, for example by having a bank account or part-time job. Interestingly, the report of the assessment did not identify programmes in schools designed to teach financial literacy as a key determinant. However, a section of the report does include a number of pieces of research carried out in different countries that show that such programmes are effective but the evidence is often on too small a scale to be able to draw general conclusions. What is not known is what types of financial education prove to be the most effective. EBEA members might be interested in testing some of the sample question contained in the report (page 54) on their 15 year old students. There is also a useful set of descriptors of what the OECD regards as different levels of financial capability (page 73). The report can be accessed through www.oecd.org/pisa .
Chair of EBEA’s Advocacy Group