From September 2020, many aspects of PSHE will become statutory parts of the curriculum in schools, including health education and relationships education. But what has happened to the “E” element of PSHE – economic education?
We read reports on a seemingly daily basis of the massive, unprecedented debt crises our country is experiencing. According to The Money Charity, in June 2018, the average UK household debt (including mortgages) was £58,540. Across the UK, people owed nearly £1.6 trillion, up from £1.55 trillion the previous year.
Yet there is no evidence that the financial education of the public at large, and certainly young people, is a priority for successive governments. If financial education is not being provided in the home (because parents and carers do not necessarily have the level of understanding to do this), what chance do we have at resolving this problem in the future without education in schools?
Many schools, however, are leading the way in delivering economic, or financial, education to their pupils in an innovative and exciting way. In Enfield, Worcesters Primary School holds financial education weeks every term where pupils get to discuss and learn about how finance works and what the risks and rewards of saving and borrowing are.
Parents are always invited to these sessions and not only get to see what their children are learning, but often get to learn new financial concepts themselves.
With the support of RedSTART Educate, a financial education charity with a focus on primary schools, they have created their own school micro-economy, which has a bank, shop and product showroom. Pupils are rewarded with “acorns” for good work, good behaviour and helping out with tasks around the school. This reinforces the first and most important lesson about money – that it needs to be earnt.
Having earnt their “acorns”, pupils now have a choice. They can either put them into a “current account” or a “savings account” in their school’s Oak Bank. The current account means they can withdraw their money at any time, while the savings account limits when they can withdraw money but does earn them interest. This lesson shows pupils that they have the opportunity for their money to grow.
The school also has a shop with items ranging from books to fidget spinners, highlighter pens to yo-yos, all of which pupils are allowed to spend their acorns on. This provides the final part of the financial education process that teaches pupils that to get what they want, they need to plan ahead and budget.
While this is an innovative and fun way to embed financial literacy into the school ethos, a lot of schools have managed to encompass these key lessons as well as other financial concepts into the school curriculum in other ways.
RedSTART Educate has recently launched a series of “bitesize” lesson plans, which not only teach young people key financial concepts such as risk, reward, interest, budgeting, borrowing and lending, but also link these topics to elements of the national curriculum for both PSHE and maths. The benefit of structuring these short 30-minute lessons is that they can all be delivered as part of the existing school day rather than as a bolt on.
The important part in delivering financial education is to keep it real and to contextualise what you are teaching. For example, compound interest delivered as a mathematical concept may prove to be a little dry at least, and totally abstract at worst. However, once taught in the context of saving and investment versus credit cards and spiralling debt, hopefully pupils will see the importance and relevance of what they are learning.
Albert Einstein once said that “compound interest is the eighth wonder of the world”. He added: “He who understands it, earns it ... he who doesn’t ... pays it. Compound interest is the most powerful force in the universe.”
Young pupils are having to consider financial implications at a much younger age than ever before. Even if they do not contribute themselves it is essential that they at least start considering decisions such as mobile phone contracts and student loans, understanding how they are different from other types of loans. As well as acknowledging the cost of the utilities that they take for granted.
We have long since stopped living in a society where there was only one electricity, gas and telephone provider, but many still retain this mentality despite the proliferation of services such as broadband, mobile phones and cable television and the associated tools such as price comparison websites.
It is essential that young pupils understand the basic concept of money and the economy before facing this minefield. However, if parents are unable to explain these basics from an early age, it becomes the moral imperative of the education system to ensure that future generations have the financial grounding necessary to progress into an ever-changing, and ever more complex, world of money.
- Julian Wright is the head of education expansion at RedSTART, a charity which exists to educate young people and give them the skills to manage their financial futures. Its services are free-of-charge for schools. Visit https://redstarteducate.org/