Post-16 Financial Education

Baroness Smith of Malvern Excerpts

Thursday 12th June 2025 Lords Chamber

[Baroness Sater]

To ask His Majesty’s Government what steps they are taking to ensure that young people receive adequate financial education in post-16 education.

[The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)]

My Lords, financial education is delivered through the national curriculum at key stages 3 and 4 through citizenship education and the mathematics curriculum. Although it is not compulsory at key stage 5, our 16 to 19 study programmes guidance sets an expectation that students take part in “other non-qualification activity” to develop life skills, including “managing personal finances”. If a student post 16 is studying a level 2 maths qualification, the maths GCSE and functional skills qualifications support financial education as well.

[Baroness Sater (Con)]

I thank the Minister for her response. This week, many schools are taking part in Young Enterprise’s My Money Week campaign. However, despite best efforts, according to the Money and Pensions Service, over half of our young people reach the age of 18 having received no meaningful financial education. Therefore, at this crucial time between the ages of 16 and 18, when they could be receiving their first pay packet and accessing financial products and services, we have no meaningful education available. Will the Minister therefore consider a national programme to ensure that all young people aged 16 to 18 are ready and equipped to navigate the financial world and manage their money? Perhaps this could be a good deployment of the dormant assets scheme.

[Baroness Smith of Malvern (Lab)]

I also recognise the contribution that Young Enterprise plays, having been both a participant in it as a student and an organiser of it as a teacher of economics and business studies. I know that it does enormously important work, as do others, in supporting children, young people and adults in understanding financial education. We could possibly look to the Money and Pensions Service, which is under the auspices of the DWP and set out in January 2020 a 10-year framework to help UK citizens make the most of their money and pensions, with a focus on financial education for young people. With respect to the dormant assets scheme, which the noble Baroness mentioned, the Department for Culture, Media and Sport confirmed earlier this year that there will continue to be funding from dormant assets for precisely the point that the noble Baroness makes, which is to challenge financial inclusion and support financial education.

[Lord Sandhurst (Con)]

My Lords, the Social Market Foundation reported last year—and this is very serious—that two in five young people, or 40%, are financially illiterate after they have been through school, so education in this field needs to start early. In the devolved nations, financial education is taught in primary schools. When will the Government start this in English primary schools? If they will not, why not?

[Baroness Smith of Malvern (Lab)]

All primary schools in England teach many of the skills that are important for financial education as part of the maths curriculum. They also have non-statutory but important programmes of study for citizenship. Of course, from the age of 11, all students have compulsory financial education as part of their national curriculum entitlement to citizenship.

[Lord Hampton (CB)]

My Lords, as a fellow teacher, does the Minister agree that, rather than having token PSHE-day education, practical financial education should be embedded in the maths curriculum throughout the key stages?

[Baroness Smith of Malvern (Lab)]

I do not necessarily agree with the noble Lord’s characterisation of the way that financial education is delivered, for example, through citizenship, but he makes an important point. I have just mentioned, of course, that financial education and the skills necessary to understand your finances and the concepts around them are part of the national curriculum from key stage 1 to key stage 4, and of post-16 maths study.

[Lord Storey (LD)]

My Lords, this is a very important Question from the noble Baroness. One in four 18 to 24 year-olds is in some form of financial difficulty. Lacking knowledge of where to go for help or services that can help them, they are often pushed to illegal loan sharks. Does the Minister not think that we should run a young person’s public information campaign, which could be targeted in colleges, jobcentres and sixth forms?

[Baroness Smith of Malvern (Lab)]

Of course, this is part of what the Money and Pensions Service strategy aims to do, as is the work I identified that is being supported by the dormant assets funding. We also need to work alongside the legitimate parts of the industry to make sure that the support and information that it is providing is made more broadly available to young people—and, in fact, to people throughout their lives. I suspect that those of us who did not have the opportunity to have even the type of financial education that children nowadays get have a continuing need to understand our finances well into our lives and, in particular, into our retirement.

[Baroness Uddin (Non-Afl)]

My Lords, I agree with my noble friend the Minister that many excellent examples exist in primary schools right across our country of financial literacy being taught to young people. Although I absolutely accept that, some urgent attention is required to ensure that children and parents are educated about their presence in the online world. Children as young as five years old are playing Roblox, and they need to extract money and card information that might be automatically available online. There is an urgent need for education very early on, but also among parents. Does she agree?

[Baroness Smith of Malvern (Lab)]

My noble friend makes an important point about the intersection of financial education and the need to ensure that our children have a good understanding about their online safety. Both those things, by the way, have been identified by the curriculum and assessment review that this Government set up as areas where it will want to say more when it reports in the autumn. As my noble friend says, parents have concerns as to whether there is sufficient space and direction in the school curriculum for these areas to be covered.

[Baroness Evans of Bowes Park (Con)]

My Lords, we all know how important it is to manage our personal finances in adult life, and I am sure the Minister is aware that research shows that financial education makes young people more confident with money management and helps them to make better and more informed financial decisions. So, will the Government consider participating in the OECD PISA study of financial literacy, which could help identify gaps in current provision and allow better monitoring and benchmarking of progress towards every young person leaving education with a strong foundation of financial capability, which I am sure we all appreciate will be invaluable in their working lives?

--- Later in debate ---

[Baroness Smith of Malvern (Lab)]

I have had some very good contacts with the OECD about the work that it is doing, not just in this area but more broadly. I cannot commit at this moment that we will take part in that study, but I will certainly undertake to go away and consider whether there are opportunities there.

[Baroness Wheatcroft (CB)]

My Lords, children leaving care are particularly disadvantaged in this area. Can the Minister say whether there will be special provision for children leaving care to be provided with financial advice for when they are really on their own?

[Baroness Smith of Malvern (Lab)]

The noble Baroness makes a very important point about the need to support young people leaving care. That, of course, is the reason for making personal advisers available to young people in that position. It is why, as we have been, and will be, debating in the Bill that comes later and more broadly in the Government’s reforms, we must be much clearer about the support available to care leavers and the offer that needs to be made available to them in all parts of the country.

[Baroness Garden of Frognal (LD)]

My Lords, the Minister spoke about citizenship in schools. We had a brilliant committee last year on 11 to 16 education, which came out with amazing recommendations, all of which the Conservative Government turned down, so it would be very nice to know that the Labour Government will pick those up. Can she say what success we are having in recruiting citizenship teachers? This was one of the big difficulties when all this was put into citizenship.

[Baroness Smith of Malvern (Lab)]

I know that since citizenship was established—in fact, I had some responsibility for it the first time I was a Minister in the Department for Education—there has been enormous progress in the ability to deliver those sorts of skills to children in our schools, but also an ongoing challenge to make sure we recruit the specialist teachers in order to be able to do that. That is why the Government are determined to increase the numbers of specialist teachers by 6,500, and why we have put in place the financial and training support in order to encourage them into the profession and keep them in it.