Sunday 10 June 2012

Sunday, June 10, 2012 Posted by Jake 7 comments Labels: , , ,
Posted by Jake on Sunday, June 10, 2012 with 7 comments | Labels: , , ,

Ripped-off Britons: Internal struggles

"We're a financially illiterate nation, with millions caught by misselling, overborrowing and being ripped off. Is it any surprise we’ve just had a debt imbued financial crisis. This must change. Companies spend billions on marketing and teaching their staff to sell – it's time we got buyers' training. The most cost effective way to start is to ensure every child in the country gets a basic understanding of personal finance & consumer rights before leaving school."
Martin Lewis,

Of all the iniquities we Britons have to endure, perhaps the most fundamental rip-off, the most insidious betrayal, has been perpetrated by successive governments of the UK. It is the continuing failure to provide compulsory and robust financial education in schools.

After decades of foot-dragging by the authorities, Martin Lewis of gave the campaign for financial education a push forward in 2011 when he collected in excess of 100,000 names on a petition to Parliament. The government’s initial response to Lewis’ petition was that it is already included in PSHEE (Personal, Social, Health and Economic Education) lessons. In a previous post we at Ripped-Off Britons pointed out the inadequacy of this. Lewis too commented:

The government also points to the Money Advice Service, formerly called the Consumer Financial Education Body, set up by the Financial Services Authority (FSA) in 2010. The government has handed control of this body to the Financial Conduct Authority (FCA), the successor (same snake, new skin) of the anaemic and discredited FSA.

Could the government be planning that this FSA/FCA controlled "Financial Education Body" will be responsible for Financial Education in Schools? This would be the equivalent of putting Herod, infamous in biblical times for the slaughter of the infants, in charge of British childcare policy. What with the FSA’s reputation for protecting consumers being about the same as Herod’s for protecting children. (To be fair, Herod had nothing against children in principal – he had fourteen of them though he did execute three). The FSA has admitted it has a poor record for regulation. The level of fines it has imposed is no deterrent, being a miniscule fraction of bonuses (zoom into the graph above, and you may just be able to spot the fines). And it was exposed by the consumer organisation Which? for shielding mis-selling financial institutions. Which? complained in May 2012 that the FSA had banned 327 misleading adverts in 2011, but had refused to identify which adverts they were. Which means if you bought something based on one of these misleading adverts, the FSA won’t tell you.

We should be appalled but not astonished if the government does plan to hand financial education in schools over to the financial industry and its regulators.

We should be appalled because, whether directly or not, this would become a marketing exercise for the finance industry. In 2008 HM Treasury, the UK finance ministry, commissioned a report by Otto Thoresen, then CEO of the insurer Aegon UK and now Director General of the Association of British Insurers. The report, on how best to deliver generic financial advice to the nation, stated:
The Review’s research also indicates that an effective Money Guidance service can drive behaviour change. Eight out of ten users of the prototype [money guidance] services surveyed went on to take at least one action within a week or so of using the service. Of these, over half took specific action such as buying a new product or speaking to a regulated adviser

In case you were wondering, “regulated advisor” = “salesman”. Already the Royal Bank of Scotland boasts that its Moneysense programme is “the largest personal finance education programme in the UK, and has a presence in 65% of secondary schools”. Financial education, when in the hands of the financial services industry, is as much about selling new products as it is about education

We should not be astonished because successive governments of all complexions have regarded us Britons as the gift that keeps on giving. Whether monarchic (the likes of King John handed our ancestors to the likes of the Sheriff of Nottingham) or democratic (Labour, Liberal, and Conservative governments hand us over to the directors of banks, energy companies, rail operators, etc. etc.). The barons show their appreciation by ripping us off and giving a cut back to the government and its ministers in the form of taxes, party political contributions, and other nice things.
Donations trend to political parties since 2004
Donations to political parties 
So, what happened after the success of Martin Lewis’ petition to parliament, raising the 100,000 signatories that would require Parliament to debate compulsory financial education in schools? :

21st November:
Formal request for a 3 hour debate in Parliament. It was agreed the debate would be held on 15th December.

14th December 2011:
Prime Minister’s Questions, David Cameron commented
“I strongly support teaching young children about the importance of financial education, but the point of having a proper review of the curriculum is to make sure that we know what is absolutely essential and core and what can be included as extra lessons.”

15th December 2011:
“That this House notes that young people today grow up in an increasingly complex financial world requiring them to make difficult decisions for the future, often without the necessary level of financial literacy; believes that financial education will help address the national problem of irresponsible borrowing and personal insolvency and that 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; further believes that the country has a duty to equip its young people properly through education to make informed financial decisions; and calls on the Government to consider the provision of financial education as part of the current curriculum review.”

The motion was duly passed. It is perhaps worth noting that while there were 227 members wanting to be associated with this campaign, for the actual debate the chamber was rather sparsely attended. Giving comfort to the government that MPs on the whole would not get out of bed to protest if the matter was once again quietly ignored.

20th December 2011:

"Dear Martin…
As you will know, schools use personal, social, health and economic (PSHE) education as a framework within which to teach young people about personal financial management. The PSHE non-statutory programmes of study include elements aimed at ensuring that, by the time they leave school, pupils should be able to manage their money, understand and explain financial risk and reward and identify how finance will play an important part in their lives and in achieving their aspirations….
David"  (lol)

"Dear Prime Minister…
So far, your government's only commitment has been Schools Minister Nick Gibb saying: "It'll be looked at in the curriculum review." That's good, but please ensure this isn't political double-speak for being filed in the bin.
Kind regards
Martin Lewis"

"Financial education is currently taught as part of the non-statutory framework for personal, social, health and economic (PSHE) education.

In July 2010, Ofsted published a report on PSHE education in schools, based on evidence from inspections of 165 maintained schools in England between September 2006 and July 2009. Inspectors found that students in those schools that were successfully developing personal finance education showed a good understanding of personal finance, used financial terms correctly and were able to apply their knowledge in making financial decisions….We are reviewing PSHE, including financial capability, to determine how we can improve the quality of all PSHE teaching and support teachers to teach the subject well. The review will allow the Secretary of State for Education, my right hon. Friend the Member for Surrey Heath (Michael Gove), to consider the place of financial education in the curriculum."

15th March 2012: 
The topic resurfaced during a debate on the Finance Bill, with the MP Chris Leslie expressing regret that the bill
“does not contain provisions to extend financial education to the compulsory part of the national curriculum….The issue has been debated on the Floor of the House and the point ought to have been accepted by the Government by now. ”

And there we have it. If anyone knows of any further progress on this, please do let us know (email us at

If Financial Education is ever made compulsory, the GCSE should have two papers:
a)      How we Britons can use financial services.
b)      How financial services can abuse us Britons.

As a bit of fun last Christmas, Ripped-Off Britons posted a Rip-Off Quiz. We thoroughly recommend some of this as the basis for the Financial Competency GCSE. If the Education Secretary would like someone to produce the exam paper, we are ready to help!

Make no mistake: used properly financial services would be a font of prosperity for the many. Regrettably, in today's Britain financial services form a cornucopia siphoning wealth away from the many to the few. 

If our children understand this, and if they help their parents understand this, and if they become adults (including becoming bankers) who understand this, then we will all be more prosperous at every stage of our lives. 

To be precise, we would all be more prosperous except the executives who currently pocket the profits of ripping off us Ripped-Off Britons.


  1. On the 25th June 2012 the Labour MP Thomas Docherty introduced a private members bill:

    "A bill to make provision for the inclusion of financial literacy in the national curriculum; and for connected purposes".

    It will get its second reading on 18th January 2013. You can follow its progress here

  2. 16th July saw an Early Day Motion in Parliament, supported by just 17 MPs

    "That this House recognises that people on low incomes are often excluded from mainstream financial services and that many have poor financial literacy skills, which makes them more likely to end up in debt; notes that this exclusion leads to a reliance on door-step lenders, pawnbrokers, payback stores and payday loans which come with vastly inflated levels of interest; and calls on the Government to take action to provide greater access to free money advice services, regulate high-interest lenders, promote alternatives such as credit unions, and ensure that everyone has access to a basic bank account."

  3. 18th January 2013 was the date of the second reading of Labour MP Thomas Docherty's bill. We reproduce the debate in its entirety:

    "Financial Literacy (Curriculum) Bill, Second Reading"
    "Not moved"

    More details here:

  4. Every old bone on my body creaks with weariness. I've taught all sorts of things to all sorts of people over my lifetime in education but I can say that telling schools they legally have to teach specific things is one of many ways of making sure that most people don't learn what was intended.

    What you can do is encourage independence of thought where it doesn't already exist, demonstrate and respond positively to a critical approach and cover basic numeracy. As children grow older challenge them to rethink in anything they get interested in. The questioning habits of mind you might kindle or keep alive are what will make children into resilient adults.

    Curriculum content prescription is no way to improve a society. It immediately and necessarily makes teachers and pupils into servants. Fortunately many of them wriggle free.

  5. As we mentioned in an earlier post, the government has included financial education as part of Citizenship. While taking Citizenship is compulsory, taking the GCSE exam is not.

    2012 figures show Citizenship (10,982 GCSEs awarded) sits between the non-compulsory study of the ancient Greeks and Romans (Classical Studies, 15,265 GCSEs) and Welsh as a second language (9,743 GCSEs). Not a subject taken seriously either by schools or students.


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