APPG on Financial Education for Young People - Call for Evidence
Response to the consultation
Credit unions have a long tradition of working with schools to provide financial education in line with their statutory objects to promote thrift and educate their members in the wise use of money. In general this takes the form of providing savings points within schools and allowing children to work with representatives of the credit union, or school staff and parents trained and overseen by the credit union, to operate the savings point themselves. This has recognised benefits for children in encouraging them to form a lasting savings habit through encouraging children to save towards a goal of some kind, fostering a recognition of the value of money and supplementing the financial education provided in the classroom.
The promotion of good financial behaviour is as much about habit forming and fostering a recognition of the value and uses of money as it is about the technical details of financial products and services and how they operate. It is here that the credit union saving club model has an advantage over more academic approaches since taking a practical part in the running of the credit union has the effect of encouraging lasting behaviour change. Similarly, in engaging with school staff and parents, credit union school savings schemes can encourage vital engagement from the wider learning support around a child and, particularly, bringing questions of saving and financial goal-setting into the home where many financial behaviours and habits are ultimately shaped.
In 2012, ABCUL undertook a survey of member credit unions to which 88 credit unions responded, more than 50% of respondents confirmed that at that time they worked with schools to provide some kind of financial education initiave. To provide more detail, there are a number of notable initiatives taking place in respect of school saving clubs run by credit unions presently (in addition to many localised initiatives):
- LifeSavers – Lifesavers is an initiative led by Church of England and its new charitable company, ToYourCredit, and pfeg / Young Enterprise. Its pilot phase was initially supported by £150,000 of support from HM Treasury and involved 6 schools in three pilot areas – Lewisham & Bromley, Bradford and Nottinghamshire. A roll out to more than 100 schools is now planned with £750,000 funding from Virgin Money and £500,000 further support from HM Treasury. The scheme involves support provided by pfeg / Young Enterprise to co-ordiante school savings clubs to be set up in participating primary schools with various supporting materials and educational support. The school saving facility is provided by participating credit unions. All funding is retained by pfeg / Young Enterprise and ToYourCredit.
- Lanarkshire Credit Union’s Savy Savers – Lanarkshire Credit Union (formerly Blantyre and South Lanarkshrie Credit Union) has had great local success in Lanarkshire through its Savvy Savers scheme which provides savings clubs in 76 primary schools and 5 secondary schools with junior savers having saved in excess of £600k with the credit union. The scheme has had particular success in maintaining saving habits among children with 1155 children who began saving at primary school age, continuing to save into secondary school and a further 448 children who joined under 16 and have now become full members after leaving school. The scheme is operated by two dedicated schools project workers who liaise with and support schools to deliver successful savings club schemes, enlist the support and help of pupils and develop a range of dedicated resources and materials. The initiative has been fortunate in enjoying a total of £104,000 from the Scottish Government’s People & Local Communities Fund to support the dedicated staff and resources which has been critical to ensruing the scheme’s success.
- Welsh Government support for credit unions in schools – the Welsh Government has supported credit unions to engage with and work in schools over a number of years, most recently with funding awarded to Merthyr Tydfil Credit Union £50,000 to procure training and resources from MyBnk and to support engagement with local primary and secondary schools to deliver financial education classes alongside school savings schemes in the borough. Similarly, the LASA Credit Union in Swansea has used support from Welsh Government for general financial inclusion activity partly to engage local schools in an initiative which was recognised by a visit from HRH the Duchess of Cornwall in 2014. The impact of this ongoing suppor from Welsh Government, both specifically to schemes like Merthyr’s or in general for credit unions’ financial inclusion activities, is attested to by the ratio of junior savers to adult members in Welsh credit unions which stands at 21% vs. 12% in England.
It is vital to note that providing savings clubs and facilities in schools is not an activity which generates any direct income for credit unions, though there is some limited evidence of indirect benefits arising from raised awareness. The success of different schemes is linked to the resource credit unions are able to secure from supporters to deliver the scheme in order to consistently and continually engage and support schools. Credit unions in general have limited profitability to fund these activities over and above their core running costs.
While we support the continued involvement of credit unions in such activity, the viability and sustainability of it for credit unions is a crucial consideration. To this end the LifeSavers’ scheme sponsors are working closely with ABCUL to ensure credit unions are able to best support the initiative and the Credit Union Foundation is utilising funding from Scape Reinvest to harness technology and develop new models of delivery which reduce costs for credit unions in delivering these initiatives thereby making the future of such activity more viable.
The full PDF version of this response is available to download on the right-hand side