Schools: Financial Education

Earl of Effingham Excerpts

Wednesday 31st January 2024 Lords Chamber

[The Earl of Effingham (Con)]

My Lords, I thank the noble Baroness, Lady Sater, for raising this debate, which I believe is of fundamental importance. As I think we all subscribe to, education has the power and the ability to hold the keys to many amazing things.

There should be four pillars to our education system: food education; physical education; financial education; and academic education. As a general broad-brush view, most people in the UK would aspire to home ownership, a decent upbringing for their children and the ability to retire in later life. All four of those educational pillars will play a key role in this outcome, but financial education arguably plays the most significant one.

Helping the young population now will have the hugely positive effect of helping them to help their own daughters and sons in 20 years’ time. Financial insecurity leads to anxiety, stress, and depression, but financial education at an early age will mitigate these risks.

Compound interest is one of the wonders of the financial world, but without a decent financial education, schoolchildren will not know that by investing only £10 per week from the age of 18, they can potentially have a retirement pot of £400,000 based on an annualised return of 9%. I do not believe it would be a difficult sell to let these children know that, in exchange for £10 per week, they could potentially have £400,000 at the age of 68. It is an easy message to get out there.

So, in this two-minute timeframe, I ask the Minister: what are the Government doing to support parents and carers in this financial education mission? Data shows that the greatest impact comes when the message is delivered by those individuals in the home, as well as those in school, and we should do everything we can to ensure that message reaches the target audience.