Financial Capability in Schools

Building Financial Futures 3

Thursday 7th February 2008

Pam Eccles Regional Director

Karen Fuller Education Consultant

Aims of today’s session …

• an introduction to pfeg (the Personal Finance Education Group)

• an overview of personal finance education in schools

• Information on resources

pfeg’s mission

to ensure that all school leavers are equipped with the knowledge, confidence and skills in financial matters to allow them to participate fully in society

Key points about pfeg

• pfeg is a registered charity – our independence and integrity are important

• By supporting teachers, pfeg aims to achieve its mission of empowering and equipping young people to manage the financial complexities of adult life

• pfeg does not have all the answers and welcomes working alongside teachers in finding the solutions

pfeg values  

• Inclusive• Importance of financial

acumen• Recognition of

pressures under which schools and teachers work

• Partnership approach

The £100 Challenge

What would you do?

• Buy a case of wine• Do the weekly shop• Put it in savings account• Pay off some debt• Give it to charity• Have a night out• Invest in a pension

Instant Gratification•Buy a case of wine•Have a night out

Practicality•Do the weekly shop•Pay off some debt

Long term investment

•Put it in savings account•Invest in a pension

Give it to charity

The need for financial education

FSA baseline survey – main themes:• Large numbers not planning ahead• Over-indebtedness• Poor product choice and exposure to risk• Under 40’s typically less financially

capable• Start at school

In a recent survey …

of people find money the hardest thing to talk about with their partners?

of all people, think an ISA is an i-pod accessory?

of the 16-24 age group do not keep track of their finances?

of partners lie about how much they spend on credit cards?

of British teenagers worry about their money and spending habits?

What percentage …

74158032

90

Source – www.creditaction.org.uk

A recent FSA report highlighted:

• 29% of 16-24 year olds said they would not know how to prepare and manage a weekly budget;

• 19% of 22-24 year olds have short-term debts over £5,000;

• One in five students dropped out of courses; Of undergraduates who considered dropping out financial difficulty was a strong factor for 34.4%;

• 94% of 16 year olds believe it is important to know how to manage money; only 53% have been taught how to

and I think it’s really sneaky …”

“I didn’t realise that banks charged you money when you borrowed from them …

What is financial capability?

• Attitudes

• Skills and competence

• Knowledge and understanding

What is financial capability?

Attitudes• taking personal responsibility for financial decisions;

• wanting to seek advice and gather information on available choices

• evaluating advice, product advertising and other information

• questioning how far to participate in financial products and services

• recognising the importance of ‘the bottom line’

What is financial capability?

Skills and competence

• day-to day money management • thinking ahead about financial needs in the future• applying knowledge and understanding about

money in different situations• being able to plan and budget and match this to

actual spend • using money and financial skills to make money

Knowledge and understanding

• knowing about basic financial services, e.g. savings accounts, debit and credit cards

• knowing when and how I might need them, e.g. student loans and mortgages

• understanding broadly how my finances fit into the economy as a whole

• understanding the concept of money

What is financial capability?

The new structure ……

Personal wellbeing supports Every Child Matters outcomes:

Economic wellbeing supports Every Child Matters outcomes:

Be HealthyStay Safe

Enjoy and AchieveMake a Positive

Contribution

Economic wellbeingEnjoy and Achieve

Make a Positive Contribution

PSHE: Personal wellbeing PSHE: Economic wellbeing and financial capability

www.qca.org.uk

Economic Well-being is concerned withEconomic Well-being is concerned with

•equipping pupils with the knowledge, skills and attributes to make the most of rapidly changing opportunities in learning and work. •learning how to make reasonable risk/reward assessments •developing their ability to informed and critical consumers of financial services and to manage their finances effectively

Economic Well-being encompassesEconomic Well-being encompasses

•Enterprise•Financial Capability

Examples:• Understanding different ways of paying for clothes• Understanding wages and salaries• Writing a weekly, monthly or annual personal budget• Deciding if I need a credit card – or a mobile phone – or

a pension – and which one?• Understanding savings and interest rates• Considering future purchases – how do I buy a car?• How much of a risk taker am I?

PSHE: Economic wellbeing and financial capability

Other subjects and courses

Financial capability can also be incorporated into core subjects:

• Mathematics – calculating types of interest on savings; percentages of spending on personal or national priorities; calculating likely turnover and profit in a business plan

• English – the role of money in literature; writing letters e.g. to the bank, or as a business

• ICT – spreadsheets for personal or business accounting; use of the Internet for research; use of email e.g. to get insurance quotations

Other subjects and courses

and into subjects and courses, which are usually optional from 14 onwards, for example:

• Sources of start-up capital in Business Studies• Globalisation in Geography• Costing products in Design and technology• The origins of capitalism in History• Values and attitudes to money in different cultures in RE• An essential element in all vocational courses?• And many others……

Personal Finance Education atPost-16

• Preparing to leave home

- loans, grants, bursaries, fees• Leaving home

- living costs, advantages/disadvantages• Later in life

- pensions, debt issues

Supporting teachers and school leaders

Termly newsletters Comprehensive website www.pfeg.org Classroom resources and the Quality

Mark Telephone support Teacher training events and conferences Support from trained and certificated

school consultants Innovative projects

Learning Money Matters

• 5 year initiative for English secondary schools to create a step change in levels of financial capability

• FSA funded • 5 regional offices• National and local campaign to raise the profile• Customised support to schools

Help with:• Developing a coherent scheme for personal

finance education across the curriculum• Planning units of work and lessons• Accessing suitable and readily available

teaching resources• Supporting in the classroom• Providing evaluation and ongoing planning

Role of school consultants

Other projects

• What Money Means

• Financial Sector Volunteers

www.pfeg.org

www.pfeg.org