Financial Education Needed more Than Ever

By: Abbi Rouse

More needs to be done to improve the nation's financial knowledge, it has been suggested.

According to Alastair Mathews, director of policy at the Personal Finance Education Group (Pfeg), education on monetary topics, ranging from UK personal loans and savings accounts to budgeting and mortgages, should be delivered over the entire duration of time that a child spends at school. Mr Mathews reported that, "like with a lot of learning", teaching about money should play a role in each of the four main stages of compulsory education and be tailored towards the specific age of the recipient.

The director stated that financial education needs to start with young children "because attitude formation starts quite early and, even though this is very basic - about the use of money and keeping it safe and saving it - it all helps to set the attitudes in the right direction". As pupils get older, Mr Mathews reported that such guidance should become more detailed, so that by the time they reach the 14 to 16-year-old age bracket they already have a certain level of awareness about fiscal matters not only from school but also from family members and their friends. In turn this can help them to foster a more responsible attitude to loans, overdrafts and other financial products and so avoid developing unmanageable money problems in later life.

He said: "Our approach to this is to emphasise the need for financial education. Young people, more than ever, need a foundation of financial education while they are still at school. We think that basic financial education should be a core and assured part of the national curriculum."

In addition, Mr Mathews asserted that levels of debt could be on track to fall as "there is bound to be an increase in caution" on the part of money lenders in terms of issuing credit. He added that borrowers are also likely to take steps to reduce their indebtedness, whether through a consolidation loan or otherwise, as they realise that they are struggling to manage their money.

The Pfeg director also reported that the nation's attitude towards finances has changed over the last few decades as Britain has "almost officially built debt in to the system now". Instead of the traditional mindset of saving up money over a period of time to fund a purchase, he claimed that more people are looking towards various forms of "easy credit", such as a quick loan, to help them to buy something.

If such guidance on finance was implemented into the national curriculum, it could well be possible that more Britons will be able to manage personal loan payments in later life. Earlier this month, Wendy van den Hende, chief executive of the Pfeg, reported that although a lot of children are interested in money they need to receive relevant teaching to help them become financially sensible with personal loans and other economic products when they reach adulthood. She pointed to research from the group indicating that about two-thirds of teenagers have a lack of understanding when it comes to loans, savings and other financial matters.

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