What a very sensible idea from a group of more than 200 MPs in today’s FT: teach children about personal finance. The All-Party Parliamentary Group on Financial Education for Young People wants financial education to become a compulsory part of the curriculum, with banks visiting classrooms.
The idea that Natwest and Barclays could send their representatives into classrooms is obviously not enormously palatable to everyone, with critics arguing that this is just another route for big business to indoctrinate innocent minds. But consider this: research from the Centre for Economics and Business Research found a lack of financial education costs the taxpayer £3.4 billion a year in debt, mis-sold financial products, failure to plan for retirement and unemployment (the CEBR estimates that financial education can reduce the risk of unemployment by 10 per cent). Meanwhile 38 per cent of consumers surveyed by Which? said they were using payday loans to pay for food or fuel, even though 48 per cent of those taking out these high-interest loans found they could not afford to repay them.
The Personal Finance Education Group says 43 per cent of young people between seven and 16 years old are worried about personal finance, and 84 per cent feel their school doesn’t do enough to teach them about money. Currently 55 per cent of secondary schools offer some kind of personal finance education. Given the CEBR and Which? stats, the current situation is too patchy to leave as it is.
Moreover, as the FT points out, big business has been visible in classrooms for years, with Tesco’s vouchers for schools scheme being the most successful example (and Cadbury’s 5,000 chocolate bars for one volleyball net scheme perhaps being the least successful). The APPG proposals are that banks would used branded materials but would not be able to push their products to pupils. There’s a case for responsible lenders teaching young people to become critical consumers of their products, rather than leaving them so wide-eyed that they can be enticed by the latest offer, or find themselves trapped in a payday loan spiral. Educating children about the complex financial world before they’ve entered that world as an adult makes sense.
Speaking of protecting children, what seems a little less sensible is the suggestion by Andy Burnham in today’s Telegraph that politicians might consider banning sugary breakfast cereals to stave off childhood obesity. Burnham is considering a 30 per cent cap on sugar in cereals, and Health Secretary Jeremy Hunt hasn’t actually been as vicious about the idea as other Tory critics, telling TV reporters this morning that he would threaten the industry with regulation too if it failed to clean up its own act.
Burnham obviously has a point that a cereal which is over a third sugar is not good for a child’s weight. The problem that the Shadow Health Secretary highlights and then doesn’t really solve is that he has bought his children sugary food without realising how bad it is for them. But as with the need for better personal finance education, the real need is not to limit consumer choice on a certain product – after all, even the healthiest child might fancy a cheery bowl of Sugar Puffs once in a while – but to teach families about healthy diets overall. Most people know that chocolate cake, eaten every day, will make you fat. But they might need a little more education on what a bowl of sugary cereal flakes does to your waistline. Laura Sandys outlined the need for better education about food for families in a recent Coffee House piece. It is far more powerful to alert people to the risks of a certain product while leaving them with the choice to continue to eat it, should they so wish.