FE0021
Written Evidence Submitted by Christians Against Poverty (CAP)
Christians Against Poverty (CAP) is one of the UK’s largest providers of free, face-to-face adult financial education. CAP delivers its financial education through money coaching and life skills courses, providing teaching on areas such as budgeting, attitudes towards money management, and navigating credit. We have over 900 Money Coaches, and through churches across the UK in 2022 over 4,400 people received expert money coaching from CAP.
CAP welcomes the Education Committee’s inquiry into financial education, and strongly agrees with the need to improve the delivery of financial education across the UK for individuals of all ages. CAP believes that the Government has a key role to play in encouraging comprehensive delivery of financial education across the UK, and in addressing inequalities in financial wellbeing across the population.
Key points:
● Financial education needs to equip individuals with the ability to navigate complex financial systems, alongside a focus on personal income and expenditure.
● Financial education could be woven across the curriculum, contextualising learning with real-life budgeting and financial choices.
● Money management skills and confidence can be taught in an age-appropriate way to all ages, helping set up young people to manage their money well in the future.
● Financial education is not limited to a school setting. Integration of financial education in the school curriculum should be seen as a levelling opportunity to complement young people's experiences with money outside of the classroom.
● Financial education needs to be practical, fun and engaging.
Firstly, CAP wishes to highlight that financial education can’t and won’t solve all financial difficulties. Around 50% of CAP clients face deficit budgets when calculated by CAP’s team of FCA-accredited Debt Advisors. It needs to be understood that people can’t budget their way out of unsustainable and unliveable incomes. People may also face barriers based on the opportunities that are available to them rather than a lack of knowledge or skills. This is not to say that financial education can’t help some people navigate their personal finances, but this cannot be seen in isolation from the risks and disproportionate disadvantages some people may face based on their location, gender, ethnicity or disability to name a few.
In the current UK system, money is an integral part of nearly every area of our lives. However, millions of UK adults still lack the confidence or knowledge required to help them budget effectively. Recent CAP polling (carried out by YouGov in July 2023) highlighted that 7% of UK adults (3.7 million) lack the confidence needed to budget effectively, whilst 4% (2.1 million) don’t know how to do so. It is important to acknowledge that currently not everyone has the necessary knowledge or confidence to manage their money. However, CAP’s polling research also found that 8% of UK adults (4.3 million) feel access to free financial education would help them to better manage their finances. This jumps to 16% of those aged 18-24 who felt that financial education would help. As a result, it seems there is real opportunity for financial education to bridge a current gap for people in the UK.
Financial education itself needs to do three things: educate people with the knowledge they require, equip them with the skills they need, and, potentially most importantly, give them the confidence to apply these principles in practice.
On the first point of ensuring they have the knowledge they need, there needs to be a greater appreciation of how someone's financial literacy and understanding of core concepts and terminology in economics can affect their decision-making. This is particularly relevant with concepts such as interest rates, bonds and ISAs. The current banking system may provide an individual with rewards or punishments based on how they navigate borrowing and saving money.
Financial education also needs to involve teaching the practical skills needed to manage money. People have to make daily decisions on how they manage their income and expenditure. It is important to provide young people with the tools and resources they need to budget, and for them to be supported to learn skills on personal decision-making in this context.
Thirdly, as acknowledged in CAP’s research, confidence can be a barrier. Financial education needs to equip young people to leave the education system feeling confident about how to manage their money. However, as not all teachers feel confident in their own personal understanding of financial concepts, this is easier said than done. This target will therefore only be met through a joint approach that resources and supports teachers, as they support their students. Another key point to raise regarding confidence is that the process should respect and appreciate individual differences. This way, students can leave with personal confidence of how they can navigate the system, without judging other people's decisions on how they choose to budget.
Beyond the core concepts that need to be achieved, there are specific topics that it would be helpful to cover within financial education. These include:
● Addressing the stigma around debt and poverty
● Learning about healthy credit use and the temptation of advertised Buy–Now-Pay-Later (BNPL) schemes
● Information about what people can do if they are in financial difficulty
To go further in this area, the Education Committee may also wish to consider how financial education may include both helping students to develop personal financial principles, and combining concepts of entrepreneurship and financial business know-how. Although some students get the opportunity to learn about these skills in the Business Studies curriculum, this is not available at all schools and is only an optional subject in others.
In CAP’s view, there are three options regarding where financial education should sit within the curriculum: within mathematics, within Personal, Social, Health and Economic (PSHE) studies, or integrated across the whole school curriculum.
If financial education were to sit within mathematics lessons, this would provide the benefit of helping students to understand how some of the numerical information they are learning applies in practice. However, there is a risk that taking a maths-first approach to financial education could mean that some students who have by the age of 11 developed a negative impression of mathematics would thus associate financial education in the same light and disengage from this too. With the current budgeting resources available, there are banking apps and money management tools which will do a lot of the calculations for the person, meaning financial competency becomes more about impulse control than mathematics.
If financial education sits within PSHE lessons, there are crossovers with the principles taught in this subject area. The fact that it is not a non-statutory subject could hold both an advantage and disadvantage. There is a benefit in that teachers can deliver the subject in a more engaging way for their students; however, some schools do not hold this subject to the same standards as others and when short-staffed or under-resourced may distribute resources away from this subject.
The third option is to teach financial education across the curriculum of all subjects, relating all learning to how it applies in a ‘real world’ setting. By enabling students to learn about budgeting and money management across all subjects, they can engage in different ways through a variety of learning styles. CAP acknowledges that it could be hard to integrate this into all lessons, especially due to the strain and resource restrictions teachers are already under, so utilising a moment in time such as the national Talk Money Week may be a beneficial minimum approach. This could provide a focused time for teachers to weave in financial education, such as making a meal on a restricted budget in Food Technology, doing plays about debt in Drama, studying a book about modern-day poverty in English, or learning about the energy and water supply systems and the varying costs that these bring to households in Science.
CAP would encourage the Education Committee to also acknowledge that financial education does not only happen in a school setting. Students will be coming into the education system with varying degrees of financial understanding based on the environment they have grown up in and the opportunities they have already had. A young person who has grown up receiving pocket money may have a very different real-world exposure to financial education than a young person who has had to work at the weekends to help pay household bills. Financial education in schools should thus be an opportunity to level the barriers and support students from low-income households.
As mentioned in CAP’s response to question 1, 7% of UK adults (3.7 million) lack the confidence needed to budget effectively (according to CAP polling carried out by YouGov of 2,220 UK adults). As a result, there needs to be consideration that some teaching staff may lack confidence about their own financial literacy, and do not feel confident enough to teach others about the topic. Therefore, there needs to be support, training and resources offered to teachers to enable them to teach financial education with confidence, and in a way that engages students.
However, in addition to a focus on financial education in a school setting, there needs to be a greater appreciation for the role parents and carers play in teaching young people about money management. Through greater funding into financial education, there could be greater availability of adult financial education. This could resource parents and teachers to build more personal confidence in this area, which would in turn benefit young people’s exposure and experience of learning about money management.
CAP would be happy to share the learning and insights we have generated as one of the largest adult financial education providers in the UK. CAP welcomes the Education Committee to reach out to discuss this further at any stage if beneficial.
CAP would welcome bringing financial education into children's education at all levels, but this needs to be done in a fun, engaging and practical way. By focusing on practising money management principles rather than learning through academic studying, children may build a more rewarding relationship with their personal finances which can start them on a positive journey throughout life.
Financial education in the primary-school level would need to be tailored and adapted to suit the age group. It would be most effective integrated into learning already taking place, whilst bringing in financial concepts and helping to address the assumed knowledge around these.
CAP would encourage an approach that incorporates financial education across the subjects, but also utilises the opportunity to teach these concepts within mathematics classes, especially in light of the Government’s proposals to ensure that all students study some form of maths up until the age of 18. Numerical literacy can help develop someone's financial education, and covering these real-life applications of maths may bring to light essential money management skills for students who have previously struggled to engage in mathematics. As a result, for the students who would be doing compulsory rather than optional maths, it would be helpful for this to be taught in a way that helps them understand the real-life application of the maths they are studying.
CAP provides money management education for UK adults. Through these engaging community-based courses, group members learn key principles that they can apply going forward, such as budgeting and how to use credit responsibly.
CAP's money coaching incorporates a variety of activities to suit a range of learning styles. This includes taking a discussion-based approach when learning about some principles to enable group members to explore options rather than label one way of doing things as ‘right or wrong’. This fosters an understanding that people should be resourced to make the best decision for them and that this may differ from one person to another. The course makes sure to contextualise the learning so that group members understand the practical applications rather than seeing the learning as abstract concepts.
Alongside helping people to understand the options they have, money coaching from CAP offers accessible and easy-to-navigate budgeting tools to practically resource people. CAP knows that these courses have not only helped the adults who have attended but also their children, grandchildren and others they care for as they are able to share this learning and the confidence they have developed in money management. In the past, CAP has delivered money management education for children and is currently carrying out research in this area. CAP would be happy to share these learnings with the Education Committee, and to have further conversations regarding this area going forward.
CAP would encourage the Education Committee to also look at examples of practical, fun and engaging financial education provision, such as RedSTART, and others who support young people to learn about money management through practical application and an interactive approach, principles CAP holds highly.
Christians Against Poverty (CAP) won’t sit back and let poverty destroy lives. CAP is a UK-wide charity that equips local churches with the tools and expertise to support people facing debt and other financial challenges in their communities.
Money coaching gives people the opportunity to learn skills such as budgeting that will have a lasting impact on their finances.
Job Clubs equip people experiencing unemployment with practical tools to find work, whilst also supporting them to rebuild their confidence and self-esteem.
Life Skills groups are designed to provide practical money-saving techniques and guidance on how to navigate life on a low income.
Debt Help provides holistic support for families and individuals facing problem debt with a free face-to-face service tackling both the financial challenge and the wider emotional impact.
All CAP’s services are provided free of charge. We are committed to our services being accessible and inclusive. We support people from all faiths. We do not discriminate by age, gender reassignment, being married or in a civil partnership, being pregnant or on maternity leave, disability, race, religion or belief, sex or sexual orientation.
January 2024