Money-saving Martin Lewis is a man on a mission. Two years ago he launched a parliamentary campaign to make financial education compulsory.
Today, he is still campaigning for a change to the curriculum that would force schools into teaching the calculation of an APR alongside algebra.
“I’m locked in a vicious circle,” he explains. “The Government says it doesn’t need to put it on to the curriculum for schools to teach it, and the head teachers say they won’t teach it unless it is there. I want them to know that I am not going away until it is.”
Since Lewis first started work on his campaign for financial education, two major things have happened in his life. First (Other OTC: FSTC - news) , he sold Moneysavingexpert, his website for savvy savers, to Moneysupermarket for a life-changing £87 million. Secondly, he became a father to Sapphire (SES: E1:NF1.SI - news) , now nearly two months old.
Both of these occurrences have only strengthened his resolve to teach the nation’s children about personal finance. A large proportion of his £10 million charity fund will go towards funding the project, while he also pledges to get the subject into the classroom “before my little girl starts school”.
“It’s not about her my knowledge of personal finance will ensure that she knows so much more about money than other children her age,” he explains. “That’s part of the problem some parents will be great at teaching their children about money, but others won’t. Lack of financial education perpetuates financial injustice.”
To prove that he is still serious about financial education in schools, Lewis’s Moneysavingexpert commissioned a study into the cost of a lack of financial education from the Centre for Economics and Business Research (CEBR). The think tank concluded that our lack of knowledge about everything from credit cards to pensions is costing the UK £3.4 billion a year.
Whether it’s the payment protection insurance (PPI) mis-selling scandal or the hole in Britain’s pension savings, Martin believes that teaching children how to handle money could have prevented at least some of the problems. Because of this, he believes, the Government needs to act to make sure children know what they are doing.
“PPI mis-selling has cost £13 billion altogether and that’s a conservative estimate,” he says.
“I’m not saying [lessons] would have prevented it completely, but it wouldn’t have been on the same scale. Even a 10 per cent reduction in the scale of it would have made a huge difference.
“The cost of introducing this is trivial, but the benefits aren’t. This stuff isn’t difficult, but the brain has to be tuned the right way to think about money.”
Lewis says he wants to educate children to ask questions about how they spend, save and invest their money, because the world has changed. “Forty or 50 years ago your bank was there to look after you, and you did what you were told. Now (Other OTC: NWPN - news) your bank is there to sell to you and you have to understand what they are trying to do. But you don’t get buyers' training, so how are you supposed to know?”
But how do we begin to teach children the skills they need in order to avoid the next raft of financial scandals? Lewis, together with the Personal Finance Education Group and the All Party Parliamentary Group on Financial Education for Young People, which he works with to try to introduce this into the curriculum, wants to take a two-pronged approach.
The first is to introduce money as part of numeracy, which he believes will have the added bonus of making maths relevant to far more pupils. “Top engineering bods need algebra, but the rest of us need to know how to work out APRs [the annual percentage rate which is used to describe how much a loan or credit card will cost you]. Maths at the moment is incredibly theoretical, but these are real examples that affect real people.”
The second prong of his attack comes under the banner of PSHE (personal, social and health education), where Lewis wants to teach something called ‘‘financial attitudes’’.
“It’s not just about understanding how to calculate things, but about whether we need them and can afford them as well,” he says. He proposes that one teacher should co-ordinate the two parts of financial education, so that the week that students learn how to calculate an APR in maths, they also learn about good and bad debt in their PSHE lesson.
Once children have learnt about these things, he believes, they will go home and teach their mums and dads. “When I’ve gone into schools and talked to children, they have gone home and saved their parents thousands of pounds,” he says. “It is simple things like switching debt and gas and electricity tariffs.”
Asked whether he believes that parents themselves should be responsible for teaching their children about money, he says that such an attitude is exactly what perpetuates financial inequality.
“You’re probably quite good at teaching your children about it,” he concedes. “But lots of parents don’t know, or aren’t confident. Or they are just wrong. I often hear parents say ‘I know what to advise my children don’t spend more than you’ve got’ but with that attitude you will never go to university or own a home.
“We need to educate the whole nation, but we have to start somewhere. This isn’t about indoctrinating everyone in the cult of Martin Lewis. It’s about giving people the skills that they need.
“Everybody wants this. Everybody supports it. It is so bleeding obvious that no one can work out why someone else isn’t doing it.”
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