Contribution
I warmly congratulate my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) on securing this important debate, and I commend him for his sustained efforts to drive up the quality and availability of financial education offered to our young people. There is sometimes a tendency in this House—perhaps an understandable one—to gravitate towards short-termism. It is therefore a sincere pleasure to follow my hon. Friend, who, along with his colleagues in the all-party parliamentary group on financial education for young people, has been doing such excellent work to promote reforms that take a longer view and are geared towards boosting the life chances of future generations.
Good financial education, delivered not only by schools, but by parents and families and within communities, has the potential to produce a generation wise to the dangers of credit card debt, alert to the practices of predatory payday lenders, and confident in their ability to open a bank account and budget appropriately. I believe that all of us in this place are truly committed to reducing inequality and ensuring that everyone has the best possible start in life, and I can think of few better ideas than ensuring that all young people enter adulthood with a sound grasp of how to manage their money.
The British public seem to share that assessment. A research survey of UK adults conducted by Santander revealed that a full 70% felt that better financial education in their younger years would have improved their ability to manage their finances through the ongoing cost of living crisis. Meanwhile, two thirds of young people believe that a lack of financial education has played a role in them amassing the debts that they hold.
Indeed, it is not just adults but children who are deeply concerned about financial matters. The London Institute of Banking and Finance reported in 2023 that 68% of children worry about money and their personal finances. That figure is hardly surprising when we consider that today’s children are the most digitally exposed in history; they face a constant barrage of offers to spend money in alluring but wasteful ways. Many of the apps downloaded on to the phones that our children spend so much time on are full of shining icons, inviting them to spend real-world money, with the tap of a finger, in exchange for worthless in-game currencies. Young players of online games are prompted to spend, in some cases, hundreds of pounds on loot boxes or so-called cosmetic items—that is, a virtual in-game weapon, or an outfit that is a slightly different colour from the default option. Financial literacy is clearly a skill that our children and young people need, to protect them and prepare them for the future.
Although there is undoubtedly still work to be done, I briefly draw the House’s attention to the solid foundations laid by successive Conservative Governments over the past 14 years. After all, the Conservatives left England as one of the top-performing countries in education. Under the Conservative Government, children in England were named the best in the west for reading, and were ranked best at maths in the western world in the 2023 TIMSS—trends in international mathematics and science study. It was a Conservative Government who created the national network of 40 maths hubs to support schools in improving their mathematics teaching. That network is a partnership between schools, colleges and other organisations that work together to provide support for maths teaching in their regions. The positive impact of those hubs on young people’s ability to manage and understand money and finance is obvious. We were clear that we intended to go further: at the last election, we set out a comprehensive plan to ensure that every child studied maths to the age of 18, so that they would leave school with good numeracy skills. That would help them to navigate their finances with confidence.
That is not to suggest that the entire burden of providing robust financial education can or should fall upon our schools. As is so often the case, families also have a central role to play in ensuring that children are imbued with good financial common sense. That does not need to be overly complex; simple measures, such as offering children small amounts of weekly pocket money, can help to normalise good habits such as saving and thinking carefully before making purchases. According to an ING survey of 12,000 parents across Europe, giving children pocket money reduces the risk of them getting into debt as adults.