Asked by: Tanmanjeet Singh Dhesi (Labour - Slough)
Question to the Ministry of Justice:
To ask the Secretary of State for Justice, what steps his Department is taking to ensure prison leavers are aware of the resettlement services available.
Answered by Edward Argar - Minister of State (Ministry of Justice)
Effective resettlement of prison leavers is a core part of our efforts to reduce re-offending. This includes making sure someone has a home, family links where appropriate, access to healthcare, a job or further education, and/or access to benefits.
Probation practitioners in the community coordinate the overall rehabilitation of offenders as they leave prison and serve their licence, supported by Pre-Release Teams (PRT) who provide support to address identified immediate resettlement needs and pre-release support for all people in prison. The immediate resettlement needs of all prisoners are assessed on entry to prison and reviewed pre-release.
Utilising both prison-based services and Commissioned Rehabilitative Services (CRS), there is a wide range of resettlement support covering accommodation, employment, dependency and recovery, personal wellbeing and finance, benefit and debt services. CRS also offers a ‘mentoring’ service, which can be delivered pre-release and follow offenders through the gate for those being released on licence to support community integration. Community probation practitioners and PRTs work proactively with prisoners to build pre-release plans and refer into these services to ensure that the right support is in place for release.
In addition, we have also introduced employment hubs where prisoners can access job vacancies and support with applications, and Prison Employment Leads who support with work-readiness and match them to jobs on release.
To further improve awareness for prison leavers, we are introducing Resettlement Passports, which will bring together key information and services that an individual needs in one place to resettle into the community, such as bank accounts, CVs and identity documents to prove the right to work and rent, as well as appointment and contact information to enable prison leavers to engage with resettlement services available.
Asked by: Charlotte Nichols (Labour - Warrington North)
Question to the Department for Education:
To ask the Secretary of State for Education, what estimate she has made of how many and what proportion of graduates in each plan will repay their (a) undergraduate and (b) post graduate loans.
Answered by Robert Halfon
Information on the proportion of graduates in each plan that will repay their (a) undergraduate and (b) post graduate loans, can be found in the ‘Student loan forecasts for England’ annual statistics publication here: https://explore-education-statistics.service.gov.uk/data-tables/permalink/92168d82-7f22-4d01-d6a4-08dbca2fee12.
The system for setting interest rates on student loans is set out in the Education (Student Loans) (Repayment) Regulations 2009, as amended. Interest rates are applied in relation to the Retail Price Index (RPI). The RPI is determined by the RPI figure for the March prior to the applicable period for new interest rates. In addition, the government, by law, must cap maximum student loan rates to ensure the interest rate charged on the loan is in line with market rates for comparable unsecured personal loans. From 1 September 2023 to 30 November 2023, the maximum interest rate has been set at 7.3% for Plan 2 and Plan 5 undergraduate student loans, and postgraduate student loans, to take into account recent increases in the prevailing market rate. From the 2023/24 academic year, student loan borrowers starting new courses will benefit from interest rates of RPI only. This change ensures that, under the new Plan 5 loan terms, new borrowers will not repay more than they originally borrowed, when adjusted for inflation.
Student loans have very different terms and conditions to commercial loans set with reference to the Bank of England base rate. Unlike commercial unsecured personal loans, student loans are available to all eligible students regardless of their background or financial history. The loans carry significant protections for borrowers. Monthly repayments are based on earnings above the relevant threshold, not on interest rate or amount borrowed. If a borrower’s income drops, so does the amount they repay. If income is below the relevant repayment threshold, or a borrower is not earning, then they do not have to make repayments at all. Any outstanding debt, including interest accrued, is written off after the loan term ends (or in case of death or disability) at no detriment to the borrower. The government is not aware of any commercial loans that offer such protections.
The student finance and funding system must provide value for money for all of society at a time of rising costs. It is important that we have a sustainable student finance system, that is fair to students and fair to taxpayers. The department will continue to keep the terms of the student finance system under review to ensure that they keep delivering value for money for both students and taxpayers.
Asked by: Charlotte Nichols (Labour - Warrington North)
Question to the Department for Education:
To ask the Secretary of State for Education, for what reason the interest rate on student loans is set higher than the Bank of England base rate.
Answered by Robert Halfon
Information on the proportion of graduates in each plan that will repay their (a) undergraduate and (b) post graduate loans, can be found in the ‘Student loan forecasts for England’ annual statistics publication here: https://explore-education-statistics.service.gov.uk/data-tables/permalink/92168d82-7f22-4d01-d6a4-08dbca2fee12.
The system for setting interest rates on student loans is set out in the Education (Student Loans) (Repayment) Regulations 2009, as amended. Interest rates are applied in relation to the Retail Price Index (RPI). The RPI is determined by the RPI figure for the March prior to the applicable period for new interest rates. In addition, the government, by law, must cap maximum student loan rates to ensure the interest rate charged on the loan is in line with market rates for comparable unsecured personal loans. From 1 September 2023 to 30 November 2023, the maximum interest rate has been set at 7.3% for Plan 2 and Plan 5 undergraduate student loans, and postgraduate student loans, to take into account recent increases in the prevailing market rate. From the 2023/24 academic year, student loan borrowers starting new courses will benefit from interest rates of RPI only. This change ensures that, under the new Plan 5 loan terms, new borrowers will not repay more than they originally borrowed, when adjusted for inflation.
Student loans have very different terms and conditions to commercial loans set with reference to the Bank of England base rate. Unlike commercial unsecured personal loans, student loans are available to all eligible students regardless of their background or financial history. The loans carry significant protections for borrowers. Monthly repayments are based on earnings above the relevant threshold, not on interest rate or amount borrowed. If a borrower’s income drops, so does the amount they repay. If income is below the relevant repayment threshold, or a borrower is not earning, then they do not have to make repayments at all. Any outstanding debt, including interest accrued, is written off after the loan term ends (or in case of death or disability) at no detriment to the borrower. The government is not aware of any commercial loans that offer such protections.
The student finance and funding system must provide value for money for all of society at a time of rising costs. It is important that we have a sustainable student finance system, that is fair to students and fair to taxpayers. The department will continue to keep the terms of the student finance system under review to ensure that they keep delivering value for money for both students and taxpayers.
Asked by: Lloyd Russell-Moyle (Labour (Co-op) - Brighton, Kemptown)
Question to the Department for Education:
To ask the Secretary of State for Education, if she will make an assessment of the potential merits of freezing the interest applied to student finance loans during (a) career breaks and (b) earning reductions relating to childcare responsibilities.
Answered by Robert Halfon
The government wants a sustainable student finance system that is fair to students and taxpayers, and which continues to enable anyone with the ability and the ambition to benefit from higher education to do so. The student finance system protects borrowers, including people on career breaks or with childcare responsibilities, if they see a reduction in their earnings. Student loan repayments are made based on a borrower’s monthly or weekly income, not the interest rate or amount borrowed, and no repayments are made for earnings below the relevant repayment threshold.
The recent student loan (Plan 5 reforms) makes the student loan system fairer for taxpayers and fairer for students, helping to keep the system sustainable in the long term. The new loan plan asks graduates to repay for longer and from an income threshold of £25,000, but also increases certainty for borrowers by reducing interest rates to RPI only. This change ensures that borrowers on the new Plan 5 terms will not repay, under those terms, more than they originally borrowed over the lifetime of their loans, when adjusted for inflation. Lower earners will still be protected. If a borrower’s income is below the repayment threshold of, currently, £25,000 per year, they won’t be required to make any repayments at all. Any outstanding debt, including interest accrued, is written off at the end of the loan term with no detriment to the borrower. No commercial loans offer this level of borrower protection. To further protect borrowers, where the Government considers that the student loan interest rate is too high in comparison to the prevailing market rate (PMR) for comparable unsecured personal loans, it will reduce the maximum student loan interest rate charged by applying a cap in line with the PMR.
A comprehensive equality impact assessment of how the student loan reforms may affect graduates, including detail on changes to average lifetime repayments under Plan 5, was produced and published in February 2022. It is available at: https://www.gov.uk/government/publications/higher-education-reform-equality-impact-assessment.
Asked by: Paula Barker (Labour - Liverpool, Wavertree)
Question to the Department for Education:
To ask the Secretary of State for Education, whether she has made an assessment of the potential merits of providing (a) financial grants, (b) interest free and (c) lower interest loans to students in the context of rises in the cost of living.
Answered by Robert Halfon
The government recognises the cost of living pressures that are impacting students. The department has made £276 million of student premium and mental health funding available for the 2023/24 academic year to support students who need additional help to succeed, including disadvantaged students.
We have continued to increase maximum loans and grants for living and other costs each year, with a 2.3% increase for the 2022/23 academic year, and a further 2.8% increase for 2023/24. In addition, students eligible for benefits, such as those who are responsible for a child, qualify for higher rates of loans to help them with their living costs at university.
Students who have been awarded a loan for living costs for the 2022/23 academic year that is lower than the maximum, and whose household income for the 2022/23 tax year has dropped by at least 15% compared to the income provided for their original assessment, have been able to apply for their entitlement to be reassessed.
The government has no plans to reintroduce maintenance grants, as it believes that income-contingent student loans are a fair and sensible way of financing higher education. In 2022, we had record numbers of 18-year-olds going to university, including those from disadvantaged backgrounds. An English 18-year-old from a disadvantaged background today is 86% more likely to go to university than in 2010.
The student funding system must provide value for money for all at a time of rising costs. It is important that a sustainable student finance system is in place, that is fair to both students and taxpayers. Interest is an important part of this. If interest payments were removed altogether, it would increase the burden to taxpayers, not all of whom will attend university. The government does not plan to further reduce interest rates on student loans. In 2022/23, student loan interest reduced public sector net debt by around £4.8 billion according to published data from the Spring 2023 Office for Budget Responsibility Economic Outlook.
Student loans are different to commercial personal loans. Monthly student loan repayments are calculated by income rather than by interest rates or the amount borrowed. No borrower will be repaying more per month as a result of changes to interest rates. Borrowers are protected. If income is below the relevant repayment threshold, or a borrower is not earning, repayments stop. Any outstanding loan balance, including interest accrued, is written off after the loan term ends, or in case of death or disability, at no detriment to the borrower. Student loans are subsidised by the taxpayer, and the government does not make a profit from the loan scheme.
To further protect borrowers, where the government considers that the student loan interest rate is too high in comparison to the prevailing market rate, it will reduce the maximum Plan 2, Plan 3 and Plan 5 interest rate by applying a cap.
New students who start courses on or after 1 August 2023 will receive their loans on new Plan 5 terms. Students with Plan 5 loans will benefit from a reduction in the interest rate to Retail Price Index only. This change ensures that borrowers on the new Plan 5 terms will not repay more than they originally borrowed over the lifetime of their loans, when adjusted for inflation.
Decisions on student finance have had to be taken alongside other spending priorities to ensure the system remains financially sustainable and the costs of higher education are shared fairly between students and taxpayers, not all of whom have benefited from going to university.
Asked by: Lord Bishop of St Albans (Bishops - Bishops)
Question to the Department for Education:
To ask His Majesty's Government, further to the Written Answer by Baroness Barran on 3 April (HL6647), what discussions they have had with (1) Barclays LifeSkills, (2) EVERFI, (3) HSBC, (4) Lloyds Banking Group, (5) NatWest MoneySense, (6) Santander Moneywise, and (7) other financial education providers, about improving financial education in the UK.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
The department has had conversations with a number of external organisations to understand what financial education programmes they deliver. This includes conversations with Barclays LifeSkills, Santander MoneyWise, the Just Finance Foundation, the Church of England, the Financial Times’ Financial Literacy and Inclusion Campaign, Young Enterprise and KickStart money.
The department has not spoken to the other organisations included in this list, but does work closely with The Money and Pensions Service (MaPS) and His Majesty’s Treasury to consider how we can support the teaching of financial education in schools. MaPS, as an arm’s length body sponsored by the Department for Work and Pensions, published their UK Strategy for Financial Wellbeing in January 2020. This is a ten-year framework to help UK citizens to make the most of their money and pensions. One of the key themes of their strategy is to support the financial wellbeing of children and young people. Their national goal is to ensure that two million more children and young people receive a meaningful financial education by 2030.
Education on financial matters throughout secondary school helps to ensure that pupils are prepared to manage their money well, make sound financial decisions and know where to seek further information when needed. Children should receive age appropriate financial education as part of compulsory education, so that those who leave school early can benefit. Financial education forms part of the citizenship National Curriculum, at Key Stages 3 and 4, but can be taught by all schools at all Key Stages. The subject covers the functions and uses of money, the importance of personal budgeting, money management, and managing financial risk. At secondary school, pupils are taught about income and expenditure, credit and debt, insurance, savings and pensions, financial products and services, and how public money is raised and spent.
The mathematics curriculum includes a strong emphasis on the essential arithmetic that primary pupils should be taught. A strong grasp of mathematics will underpin pupils’ ability to manage budgets and money, including, for example, using percentages. The secondary mathematics curriculum develops pupils’ understanding in relation to more complex personal finance issues such as calculating loan repayments, interest rates and compound interest.
MaPS has published financial education guidance for primary and secondary schools and we will deliver a series of webinars in due course. The MaPS guidance can be found attached.
Asked by: Lord Bishop of St Albans (Bishops - Bishops)
Question to the Department for Education:
To ask His Majesty's Government, further to the Written Answer by Baroness Barran on 3 April (HL6647), what steps they are taking to provide financial education for those who leave school early.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
The department has had conversations with a number of external organisations to understand what financial education programmes they deliver. This includes conversations with Barclays LifeSkills, Santander MoneyWise, the Just Finance Foundation, the Church of England, the Financial Times’ Financial Literacy and Inclusion Campaign, Young Enterprise and KickStart money.
The department has not spoken to the other organisations included in this list, but does work closely with The Money and Pensions Service (MaPS) and His Majesty’s Treasury to consider how we can support the teaching of financial education in schools. MaPS, as an arm’s length body sponsored by the Department for Work and Pensions, published their UK Strategy for Financial Wellbeing in January 2020. This is a ten-year framework to help UK citizens to make the most of their money and pensions. One of the key themes of their strategy is to support the financial wellbeing of children and young people. Their national goal is to ensure that two million more children and young people receive a meaningful financial education by 2030.
Education on financial matters throughout secondary school helps to ensure that pupils are prepared to manage their money well, make sound financial decisions and know where to seek further information when needed. Children should receive age appropriate financial education as part of compulsory education, so that those who leave school early can benefit. Financial education forms part of the citizenship National Curriculum, at Key Stages 3 and 4, but can be taught by all schools at all Key Stages. The subject covers the functions and uses of money, the importance of personal budgeting, money management, and managing financial risk. At secondary school, pupils are taught about income and expenditure, credit and debt, insurance, savings and pensions, financial products and services, and how public money is raised and spent.
The mathematics curriculum includes a strong emphasis on the essential arithmetic that primary pupils should be taught. A strong grasp of mathematics will underpin pupils’ ability to manage budgets and money, including, for example, using percentages. The secondary mathematics curriculum develops pupils’ understanding in relation to more complex personal finance issues such as calculating loan repayments, interest rates and compound interest.
MaPS has published financial education guidance for primary and secondary schools and we will deliver a series of webinars in due course. The MaPS guidance can be found attached.
Asked by: Rachael Maskell (Labour (Co-op) - York Central)
Question to the Department for Education:
To ask the Secretary of State for Education, what assessment she has made of the potential merits of introducing classes for school leavers to assist with life skills such as budgeting and preparation for work.
Answered by Nick Gibb
Education on financial matters helps to ensure that young people are prepared to manage their money well, make sound financial decisions and know where to seek further information when needed.
Finance education forms part of the citizenship National Curriculum at Key Stages 3 and 4, but can be taught by all schools at all Key Stages. The subject covers the functions and uses of money, the importance of personal budgeting, money management, and managing financial risk. At secondary school, pupils are taught about income and expenditure, credit and debt, insurance, savings and pensions, financial products and services, and how public money is raised and spent.
The secondary mathematics curriculum develops pupils’ understanding in relation to more complex personal finance issues such as calculating loan repayments, interest rates and compound interest.
My right hon. Friend, the Prime Minister, has set out a new mission to ensure all pupils study some form of mathematics to 18, equipping them with the skills they need for the jobs of today and the future. This includes having the knowledge to feel confident with finances in later life, including things like finding the best mortgage deal or savings rate.
The Department works with the Money and Pensions Service (MaPS) and HM Treasury to support the effective teaching of financial education in schools. MaPS has published financial education guidance for primary and secondary schools and the Department will deliver webinars for schools in due course. The MaPS guidance can be found here: https://maps.org.uk/2021/11/11/financial-education-guidance-for-primary-and-secondary-schools-in-england/.
The Department is providing £31 million of funding in 2023/24 to support secondary schools and colleges to deliver high quality careers education and work experience, including the national rollout of Careers Hubs.
The Careers and Enterprise Company (CEC) will ensure that Careers Hubs increase young peoples’ exposure to employers and to more in-depth workplace experiences. These experiences give young people a real feel for work and the knowledge they need to succeed.
Asked by: Lord Bishop of St Albans (Bishops - Bishops)
Question to the Department for Education:
To ask His Majesty's Government what steps they are taking to promote financial literacy in schools.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
Education on financial matters helps to ensure that young people are prepared to manage their money well, make sound financial decisions and know where to seek further information when needed.
Finance education forms part of the citizenship National Curriculum, at Key Stages 3 and 4, but can be taught by all schools at all Key Stages. The subject covers the functions and uses of money, the importance of personal budgeting, money management, and managing financial risk. At secondary school, pupils are taught about income and expenditure, credit and debt, insurance, savings and pensions, financial products and services, and how public money is raised and spent.
The mathematics curriculum includes a strong emphasis on the essential arithmetic that primary pupils should be taught. A strong grasp of mathematics will underpin pupils’ ability to manage budgets and money, including, for example, using percentages. The secondary mathematics curriculum develops pupils’ understanding in relation to more complex personal finance issues such as calculating loan repayments, interest rates and compound interest.
My right hon. Friend, the Prime Minister, has set out a new mission to ensure all pupils study some form of mathematics to 18. Studying mathematics to 18 will equip young people with the quantitative and statistical skills that they will need for the jobs of today and the future. This includes having the knowledge to feel confident with finances in later life, including things like finding the best mortgage deal or savings rate.
The Department works with the Money and Pensions Service (MaPS) and HM Treasury to support the effective teaching of financial education. MaPS has published financial education guidance for primary and secondary schools, and we will deliver a series of webinars in due course. The MaPS financial education guidance for primary and secondary schools can be found in the attached documents.
Asked by: Nadia Whittome (Labour - Nottingham East)
Question to the Department for Education:
To ask the Secretary of State for Education, with reference to Building Beyond Barriers – A roadmap for enhancing financial education in schools of the APPG on Financial Education for Young People, published on February 2023, if she will take steps to help ensure that all school-aged children receive financial education by 2030.
Answered by Nick Gibb
Financial education forms part of the National Curriculum for citizenship at Key Stages 3 and 4 but can be taught by all schools at all Key Stages. More information can be found here: https://www.gov.uk/national-curriculum. The subject covers the functions and uses of money, the importance of personal budgeting, money management, and managing financial risk. At secondary school, pupils are taught income and expenditure, credit and debt, insurance, savings and pensions, financial products and services, and how public money is raised and spent.
The mathematics curriculum includes an emphasis on the essential arithmetic that primary pupils should be taught. A strong grasp of mathematics will underpin pupils’ ability to manage budgets and money, including, for example, using percentages. The secondary mathematics curriculum develops pupils’ understanding in relation to more complex personal finance issues, such as calculating loan repayments, interest rates and compound interest.
The Department works closely with the Money and Pensions Service (MaPS) and HM Treasury to consider the wide range of evidence for financial education and to explore the opportunities to improve availability of high quality financial education. MaPS has a statutory duty to develop and co-ordinate a national strategy to improve people’s financial capabilities and their ten year strategy, published in 2020, set out their national goal that two million more pupils and young people will receive a meaningful financial education by 2030. The strategy is supported by Delivery Plans for each nation of the UK and details can be found here:https://www.maps.org.uk/uk-strategy-for-financial-wellbeing/.
There is a wide range of support available. MaPS published financial education guidance for primary and secondary schools in England to support head teachers and education decision makers to enhance the financial education currently delivered in their schools. This guidance is available at: https://maps.org.uk/2021/11/11/financial-education-guidance-for-primary-and-secondary-schools-in-england/.