Money matters
May 2007
An interview with Wendy van den Hende, Personal Finance Education Group
Kim Thomas
It’s not easy being young today. Thirty or forty years ago, it was still possible to leave school at 16 or 18 and get a job, or to go to university on a generous student grant. House prices were low. Today, the demise of the student grant, the introduction of tuition fees, and the escalating cost of housing all mean that young people can find themselves taking on huge debts soon after leaving school.
And yet there is almost nothing about how to manage personal finance in the National Curriculum. “Blink and you’d miss it,” says Wendy van den Hende, Chief Executive of Personal Finance Education Group (pfeg). “It’s perfectly possible for some children to go through the whole of their school life without having any financial education.”
Wendy’s job is to change that. The pfeg was formed in 1996 when a group of people in the financial sector put together a project group to address the lack of financial literacy in the English school curriculum. For four years it remained a fairly informal grouping; Wendy joined in 2000 when the informal group became a registered charity. At about the same time, the Financial Services Authority (FSA) was created to regulate the financial services sector. The FSA recognised the value of pfeg as a body that could educate schoolchildren about personal finance without facing a conflict of interest. Since then, the two organisations have worked closely together, and the FSA is funding the pfeg’s current project, Learning Money Matters. That funding has enabled pfeg to grow from six staff just a year ago to 45 staff today.
Faced with a blank sheet of paper, Wendy began her stint as CEO by introducing a kite mark for financial resources used in the classroom. To achieve the kite mark, the resources have to have been tested out on teachers, they must be accurate and up-to-date, and they must have “appropriate branding”, so that even if they’re produced by a bank or financial services organisation, they’re not promoting a particular product.
She also put together a project called ‘Excellence and Access’ which aimed to raise the confidence and competence of teachers in the field of personal finance education. The idea, says Wendy, was to “create a critical mass of schools that were doing something useful so it could be rolled out across the country.” In the four years the project ran, pfeg worked with 365 schools.
Learning Money Matters, launched in July 2006, aims to introduce personal finance education into at least two-thirds of English secondary schools, including independent and special needs schools. So far, more than 900 schools have enrolled in the scheme; the plan is to reach 4,000 schools by 2011 when the project ends.
To accompany the launch of Learning Money Matters, pfeg published some research that showed over half of England’s teenagers have been or are in debt by the time they are 17. Of course, says Wendy, most of this debt will be money borrowed from family or friends, but, she points out: “They’re getting into the idea that this is the way you manage your life rather than saving up till you’ve got the money.”
The idea behind the project, she says, is to give children a sound grasp of financial matters: “What we’re about is long-term sustainability. So we want to make sure it gets embedded across a number of subjects across the school day.” There are good reasons for not teaching it solely through the maths curriculum: “We do work with maths people, and we have done some work on developing a maths resource but the problem with maths is that it’s about the facts and figures. You can learn to manipulate percentages and understand what compound interest does, but it doesn’t necessarily help you make a good decision.”
A lesson on buying a car, for example, would include looking at the extra costs involved, such as petrol and insurance. A discussion on why 19 year-old men have higher insurance premiums than other drivers, says Wendy, is a good way of teaching about risk, statistics and probability.
Children also need to understand finance in a broader context, she says: “If you think about the emotions, attitudes and behaviours that go into making a good financial decision, it’s not all about numerical skills. The personal bit is really important, and the responsibility: how do you make your decisions? How do you look at things like the global economy, Fairtrade and ethical investment? There are all sorts of moral issues that children are really interested in as well as the practical things like how to work out the best tariff for your
pfeg now employs 20 full-time educational consultants, and has a policy of working closely with teachers and finding out what kind of support they need. “We don’t go in there and tell them what to do. Each school will have individual solutions to how they want to approach this. They may want to do it through the whole school, or they may want to do it through the maths department or through the PSHE tutors, or they may want to do an off-timetable day where they spend a whole day doing a range of activities. We will help them with that – if they want to team teach, our consultants will go in and teach with them.”
The work of the consultants is backed up by a website packed with freely available resources, including case studies, lesson plans and video clips. Because some teachers, particularly in primary schools, don’t have permanent access to the internet, pfeg also produces free CD-Roms and DVDs. These include interactive games and exercises for students, such as ‘Risk and Reward’, in which students have to set up a business, plan an event and keep a tally of income and expenditure.
Wendy believes that, after years of hard work, pfeg is finally succeeding in getting personal finance taken seriously as part of the curriculum: “All the publicity that debt gets has shifted the agenda in making it vital that young people have these skills, and we’ve played a key part in that in providing the solutions. And I do feel very proud that an organisation that in 2000 was two people has managed to provide such a comprehensive service to our young people.”