Initial leadership on financial education issues in the United Kingdom was assumed by the Financial Services Authority (FSA). The FSA was an independent nongovernmental body, given statutory powers by the Financial Services and Markets Act 2000 to regulate the financial services industry in the United Kingdom. It was replaced in April 2013 by the Financial Conduct Authority and the Prudential Regulation Authority, with some of its responsibilities given to the Bank of England. Prior to these institutional changes, the FSA responsibilities for financial education were given in 2010 to the Consumer Financial Education Body, now the Money Advice Service (see below).
The Money Advice Service is currently (December 2013) engaging with stakeholders who are involved in financial literacy as part of the development of a revised United Kingdom Strategy for Financial Capability. The strategy will look at financial literacy across the life time of an individual and what is required to support and enable people to take control of their money as best they can and it will be published in spring 2014. Building financial literacy in young people through the development of skills, knowledge and behaviour will be a core focus of the strategy and it will build upon financial literacy and education initiatives that are currently being undertaken.
The initial strong leadership by the FSA has been a significant factor in ensuring that financial education is included in all of the education curricula for each of the four countries in the United Kingdom. One of the four objectives that Parliament set the FSA was to promote public understanding of the financial system, and one of the FSA’s strategic aims was to ensure that customers achieved a fair deal.
As part of their work to deliver against these, in autumn 2003, the FSA brought together a partnership of key people and organisations in government, the financial services industry, employers, trades unions, and the educational and voluntary sectors to establish a road map for delivering a step change in the financial literacy of the United Kingdom population. The result of this process was the commitment to lead a National Strategy for Financial Capability, work which began in 2006. One of the seven main programmes in the National Strategy was focused on ensuring that young people in schools develop positive attitudes towards money. This work was informed by the benchmark survey into financial literacy in schools, conducted in 2005. The document, “Creating a Step Change in Schools”7 was published in light of this research, in 2006, and set out a two-pronged strategy for schools - i) to raise the profile and status of financial literacy in national curricula across the United Kingdom, and ii) to ensure teachers feel confident and competent in delivering personal finance lessons to their pupils.
Complementing and building on the FSA’s National Strategy, in 2007 the United Kingdom Government set out its long-term aspirations to improve financial literacy in the United Kingdom including that every child has access to a planned and coherent programme of personal financial education in school. In 2008, the Government and FSA set out a joint action plan for financial literacy which defined how the FSA’s National Strategy and a variety of Government programmes would support the shared goal of more financially capable citizens, including a significant joint programme of work to support personal financial education in schools.
In a March 2008 report, the Office for Standards in Education (OFSTED) identified common barriers to the development of personal financial education. Similar barriers have been identified in other studies, such as the Scottish Government’s report into financial education in Scottish schools, and National Foundation for Educational
Research’s report into the FSA-funded ‘Learning Money Matters’ programme of the Personal Finance Education Group (pfeg). These included pressure on curriculum time, teachers’ lack of subject knowledge and expertise; a lack of awareness of resources and other forms of support and the wide variation in provision in post-16 education.
The FSA’s role has been to ensure personal financial education was embedded in education policy frameworks and to ensure that teachers are supported in delivering personal financial education. The FSA’s United Kingdom wide remit meant it was well placed to co-ordinate financial literacy provision in schools in England, Scotland, Wales and Northern Ireland. In order to best influence Government policy to include financial literacy within the school curriculum, the FSA worked with education policy experts across the United Kingdom. As education is a devolved function, the FSA worked with policy makers in England, Scotland, Wales and Northern Ireland, identifying where personal finance sits within each policy framework, and showing how personal finance can be embedded in a way that is meaningful to schools. The FSA set up a schools working group in 2004 that was comprised of representatives from key Government departments across the United Kingdom, to ensure buy-in to the approach from the outset of the project. The strategy document “Creating a Step Change in Schools”8 sets out the outcomes from this working group.
Working with education experts, FSA identified opportunities to input into existing curriculum reform programmes across the United Kingdom, taking the opportunity to raise the profile of financial literacy in national curricula as part of wider curriculum reform. For example, they were able to effectively engage with the secondary school curriculum reform programme in England in 2007. As a result, financial literacy was given a far greater status and profile in secondary schools in England when a new curriculum was implemented in 2008.
Across the United Kingdom, an emphasis on the cross-curricular nature of personal finance education has enabled teachers to integrate aspects of personal finance into existing lessons. Teaching financial literacy through or as part of other subjects helps to give it a place in a crowded curriculum. The FSA has found it was helpful to promote the ways financial literacy can be integrated into existing curricula. For example, many schools taught financial literacy in Personal, Social, Health and Economic (PSHE) education, and in mathematics, but there were opportunities to integrate financial concepts in home economics, English, geography, and drama, for example. By highlighting the cross-curricular nature of financial literacy, the FSA ensured that financial literacy was not seen as another initiative in schools, and that it was something that teachers could integrate within existing curricula.
When engaging with Government, the FSA made appropriate links with high-level government policy. For example, in England one of the five Every Child Matters outcomes is to ensure all children ‘achieve economic wellbeing’. FSA promoted the teaching of personal finance in schools to be a key way of contributing to this strategic outcome. Similarly, in Wales the Financial Inclusion Action Plan is closely linked to financial literacy. The FSA has successfully made the case that financial literacy in schools is vital to ensuring the future adult population in Wales understands the financial choices available to them.
The FSA’s work and the support, in particular, of key education ministers, has ensured that financial literacy is contained in national curricula across the United Kingdom in varying degrees, typically within personal and social education frameworks and mathematics frameworks. In England, for example, financial literacy is an explicit strand of PSHE education. There are also explicit opportunities to leam about personal finance in mathematics, and citizenship lessons.
From September 2014, finance education (as part of the subject of citizenship) will be compulsory within the National Curriculum in England. Financial education is compulsory for certain age groups in Northern Ireland and Scotland (see Chapter 3, Financial Education Learning Framework in Northern Ireland, United Kingdom; and Financial Education Learning Framework in Scotland, United Kingdom). In Wales, the Literacy and Numeracy Framework (LNF) became a statutory curriculum requirement for schools from September 2013. It is a curriculum planning tool that provides opportunities for developing numeracy skills - including money skills - across the curriculum and lays down the building blocks for financial education from Foundation Phase upwards. It supports all teachers to embed literacy and numeracy in their teaching of the curriculum. It provides learning outcomes/standards, is endorsed by government, and is statutory for ages 5 -14.
However, even with a statutory footing, quality of teaching is not guaranteed and there needs to be adequate teacher training, both as part of initial teacher training and within continuing professional development, to ensure national curricula is taught effectively. Thus it is important for Government to give a clear signal to schools of the importance of personal financial education. This works on three levels: teachers need adequate training and support so they feel confident and competent in delivering personal financial education; schools need to understand the importance of a planned and coherent programme of personal financial education in their school; and financial education needs to have sufficient prominence in Government policy. It is also important for Government, the regulator, the voluntary sector and the financial services industry - the key sectors who work with schools- to understand the contribution each sector makes. The FSA worked strategically with each of these sectors to encourage a co-ordinated, joined up approach to personal finance in schools and to ensure work was complementary and, where possible, not duplicative.