At Park Lane Primary School in Warwickshire, pupils are no strangers to money. When they reach Year 6, they get access to their own common room, which has an honesty café, where payment for food and snacks is left up to them.

Then, on Friday afternoons, the school transforms into a “university”, where every child participates in seminars, including those about financial awareness. These sessions ask students to work together to find solutions to everyday money tasks, from booking a holiday to pocket-money budgeting.

It’s all part of a drive by the school to equip children with important life skills, says headteacher Alex Ladbury.

“A big part of our ethos is to set children up for life,” she says. “It raises their aspirations and we feel that it’s crucial to offer real-life initiatives.”

Financial education was introduced to the national curriculum in 2014 but provision across the UK still varies enormously.

In Northern Ireland, it’s on the national curriculum from ages 4 to 14, through maths and numeracy. The same goes for Scotland, for children aged 3 to 14, and in Wales, it is also taught at primary and secondary schools. Only in England is financial education not on the primary school curriculum, although it is taught in secondary schools as part of citizenship and maths.

“It’s an inconsistent approach,” says Lindsey Appleyard, from Coventry University’s Research Centre for Business in Society.

“Even with financial education being on the national curriculum in secondary schools in England, 75 per cent of those schools are academies or free schools, which means they don’t actually have to follow the curriculum.”

Appleyard’s research focuses on financial geographies and financial inclusion, and she has studied financial education in schools, universities and with cash-squeezed households. She says there is growing evidence that putting money matters on the timetable is something that children and young people are keen for, and in need of, too.

A 2021 study of more than 2,000 young people aged 15 to 18, published by the London Institute of Business and Finance, found that 83 per cent wanted to learn more about the financial system in school and 67 per cent regularly worried about money and personal finances. The report also found that 41 per cent didn’t know how a student loan works, which is worrying, given that many students will go on to higher education.

Furthermore, 60 per cent said they would like financial education to be a separate subject rather than it being incorporated into maths, economics, PSHE (personal, social, health and economic education) or citizenship.

Lisa Davis, senior policy and propositions manager at the Money and Pensions Service (MaPS), the government-funded financial guidance organisation, agrees that the current approach is missing the mark.

“We know from our evidence base that less than half of UK children are receiving a meaningful financial education, either delivered by parents at home or in the classroom,” she says. “That’s about 5.3 million children missing out on this vital learning.”

And that means we’re sending them out into the world unprepared, Appleyard says.

“We need to teach children and young people to manage their money well, now and in the future, for their own personal financial wellbeing.

“They need to be prepared to make important financial decisions, such as whether they go to university, and, if they do, how they’re going to pay for it. These are decisions they’re making at quite a young age and they need to understand the longer-term impact of those decisions.”

And she argues that financial education in schools matters now more than ever.

“Over the past 40 years, governments have shifted greater risks and responsibilities on to the individual. We’ve seen that through home ownership, and increasing reliance on our own savings rather than the state as a safety net. And we’ve seen it through the increased use of food banks,” she says.

“The financial system isn’t necessarily designed to promote good financial decision-making for individuals: banks and other financial institutions are designed to make a profit for their shareholders. Even before the pandemic, there was growing income insecurity for people in and out of work, and a 2017 Financial Conduct Authority survey suggested that half of UK households were financially vulnerable, with little or no savings.”

So, how should financial education be taught? Applyard says inclusivity is key. She refers to a 2012 study in which she and her colleagues went into two Birmingham primary schools, one in an inner-city area and another in a wealthier, middle-class area.

“We were looking at children’s understanding of money and we found that, in both contexts, they were very sharp and knowledgeable about money,” she says. “But they had very different experiences. So, when financial education is being taught, it’s really important that it is sensitive, acknowledges different household circumstances, and recognises that there are diverse experiences of money and how to manage it.

“This can be done by drawing on illustrative case studies and focusing on the need to set goals to underpin our short-term decisions that can empower us and promote longer-term gains. A critical understanding of the financial system is key for them to be active, informed citizens beyond what type of financial products are available. Just talking about savings products and pensions isn’t necessarily sufficient.”

There is some evidence that teaching GCSE maths with more personal-finance context could improve student attainment - and that’s something that Maths in Context, a research project co-funded by MaPS and the Education Endowment Foundation, is currently exploring.

It is based on a pilot study of 26 London secondary schools, conducted between 2013 and 2015, which found that delivering areas of the mathematics curriculum using a financial context led to an increase in attainment of approximately 18 per cent on related GCSE questions. The study has now been scaled up to include 130 secondary schools across England.

“The results are due in the autumn and we’re really excited about that,” Appleyard says. “While we don’t believe that maths is the only place we should be teaching financial education, if you can prove that using real-life examples of money management impacts on GCSE results, then it’s a win-win for financial education within the maths curriculum.

“We also think that citizenship and PSHE are really important because money isn’t just about being able to add up. It’s not just about percentages or compound interest, it’s also about how you feel about money, your wants, needs, your relationship with money.”

There are reasons to be cheerful. In the 2021 London Institute of Business and Finance report, 64 per cent of students said they had access to financial education compared with only 29 per cent in 2015 (a year after it was introduced to the curriculum).

But if financial education is to succeed in schools, Appleyard says, it should be teacher led.

“We need a bottom-up approach. In the research we’ve done, it’s clear that we need great leadership from the headteacher and there needs to be some kind of champion to really drive the learning. Schools can include the wider community of parents and carers, too, as this creates experiential learning that’s more likely to stick.

“At the age of 11, children can open bank accounts and most of them have mobile phones by then, so they could be introduced to savings apps with built-in nudges, reminders to help them reinforce good financial habits. Making this inclusive for both adults and children is the way forward.

“We know that financial education has a limited impact on its own because it’s a messy, emotional process. We need to be more inclusive rather than saying ‘Hands up, who’s got a job?’ or ‘How much money do people get each week?’ That’s not inclusive. Having it embedded in the curriculum in maths and citizenship is a great way of making sure that it is consistent.”

Christina Quaine is a freelance journalist

This article originally appeared in the 30 July 2021 issue under the headline “Tes focus on...Financial education”