FOOL'S EYE VIEW
Early Lessons In Money

By Cliff D'Arcy
January 9, 2003

This is the time of year when December's bank statements and credit card bills arrive and many people learn that their excessive Yuletide spending has caused a painful financial hangover.

As consumers cope with falling savings and rising debts, it's clear there's a widely accepted need for better financial education so that we can make more informed decisions.

It's never too soon to start learning about money management - the earlier the better - and that's why the Personal Finance Education Group (PFEG) has taken encouraging steps to provide young people with vital lessons on this topic.

Demand from schools is high: a recent survey revealed that 48% of pupils ranked money advice as being more important than guidance on good parenting or sex education. Furthermore, 87% of secondary schools ranked money management as a very or fairly important topic, and a staggering 89% wanted it included in the Curriculum.

We last wrote about PFEG in a Fool's Eye View in November 2001. It is a registered charity that is endorsed by the government through the Department of Education and Skills and the Financial Services Authority (FSA). PFEG receives funding from some of the biggest names in finance, with industry sponsors including the Association of Investment Trust Companies, Barclays (LSE:BARC), HSBC (LSE: HSBA) and Prudential (LSE:PRU).

Over the last year, PFEG has been rolling out its "Excellence and Access" initiative across the UK, including schools in Salford, Norfolk and Lewisham. This programme covers secondary, grammar and special needs schools, plus units for disadvantaged young people such as foster children and teenage mothers.

PFEG is sharing its expertise with schools through a combination of teacher-training modules, high-quality materials (much of which carries a PFEG Quality Mark), model lessons and sharing best practices.

Topics covered include budgeting skills, understanding credit and managing debt, ethical investing, planning for independent living and the differing cultural approaches to personal finance.

A "life event" approach helps pupils to anticipate events including opening a savings account, buying a car, parenthood, buying a home and even retirement planning. This helps pupils to plan their way through an increasingly complex and diverse financial market place and promotes long-term security.

Since attitudes to money vary across different cultures, the programme also explores issues around cultural diversity and tackling financial exclusion and inequality.

Although the long-term goal is financial education from as early as Year 5 or even Reception classes, the focus at present is on 11 to 19-year-old pupils, whose needs become more urgent as they approach school-leaving age and face the challenge of independent living.

Thanks to an already full Curriculum, there is enormous pressure on resources and teachers - many of whom are enthusiastic, even passionate, about financial education. Recognising this, PFEG offers the support of specialist advisers working alongside teachers to build knowledge among staff and pupils, who often expressed a lack of capability in the same areas.

Although financial matters are covered in Business Studies and Economics courses, these are optional, so many pupils do not benefit from this teaching. Therefore, PFEG programmes are delivered through compulsory Citizenship and Personal Social and Health Education (PSHE) lessons. Teachers in IT, Mathematics, English and Geography also provide a focus on local economic issues, helping to bring money matters closer to home.

Earlier this week, pupils from Catford Girls' school gave an entertaining video presentation to industry figures in the form of a chat show where young "guests" received advice from other pupils, supported by advisers from the local Citizens Advice Bureau and Credit Union.

The school's presentation on coping with debt clearly demonstrated pupils' understanding of the damage that unmanageable debt can have on health and relationships. Topics covered included problem gambling, doorstep debt collectors and the challenge facing Muslim students (because the Islamic religion forbids the borrowing or lending of money for interest).

By the end of this year, PFEG's goal is to have provided resources and expertise to 45 Local Education Authorities, covering up to 400 schools. This should provide 800 teachers with personal finance training skills, with the result that up to 130,000 pupils will have participated in personal finance lessons. This is an important start, but involves just one secondary school pupil in forty (2.5%), so there is a long way to go.

PFEG is halfway through a four-year project that has made good progress and is having a positive impact on young peoples' lives, as evidenced by the encouraging feedback from pupils and staff. The Fool is delighted that PFEG is working towards producing more financially confident citizens, and believes that children, parents, teachers and financial services companies alike should congratulate the charity.

More: Investing for Children