The All-Party Parliamentary Group (APPG) on Financial Education for Young People today launches its report calling for compulsory money lessons in schools.
It proposes that secondary school teaching be split between maths lessons where kids are taught about basic money skills, such as how interest rates work; and Personal, Social, Health and Economic (PSHE) education, which teaches more subjective aspects such as budgeting.
The APPG, launched in January, has the support of 226 MPs and Peers. It launched its enquiry two months later, which has resulted in today's report.
A survey carried out by the inquiry found in English schools only 45% of teachers said they had ever taught financial education.
Conservative MP Andrew Percy, chairman of the inquiry, says: "Credit cards, mortgages, hire purchase agreements, mobile phone contracts, tuition fees and even supermarket offers all require us to apply functional maths skills, such as being able to calculate APR, compound interest and percentages, to real-life situations.
"But too many of our school leavers, who can perform complex mathematical equations and Algebra, have no idea what basic financial terms like APR and PPI mean leaving them without the necessary level of financial literacy to make decisions in an increasingly complex financial world.
"We believe financial education is a long term solution to the national problem of irresponsible borrowing and personal insolvency.
"Furthermore, teaching people about budgeting and personal finance will help equip the workforce with the necessary skills to succeed in business and drive forward economic growth."
What does the report ask for?
The report makes the following key recommendations for primary and secondary school education:
- Primary school teachers should teach basic money and maths skills from an early age.
- Primary teachers should have a minimum GCSE grade B in maths and they should be given maths refresher training
- Personal finance education should be taught cross-curricular in secondary schools.
- Maths classes should focus on numeracy, highlighting how they relate to real life decisions
- PSHE should focus on subjective aspects.
Martin Lewis, MoneySavingExpert.com creator, says: "For once, thankfully, we have a bunch of politicians who aren't pussy-footing around.
"They're actually using the C word compulsory. We need compulsory financial education in our schools.
"Our nation is financially illiterate. For over 20 years we've educated our youth into debt when they go to university, but never about debt.
"Breaking this cycle will mean less mis-selling, fewer bad debts, better consumers and could save the public coffers a fortune."
MPs' debate on Thursday
Meanwhile, a Parliamentary debate on providing compulsory financial education in schools is scheduled to take place in the main chamber of the House of Commons on Thursday.
The news is a massive victory for MoneySavingExpert.com as it is a direct result of the government e-petition we tabled which calls for compulsory money lessons for kids.
The petition hit the magic 100,000 signatures last month, which is the trigger at which point all issues raised in government e-petitions are considered for debate in the House of Commons.