Financial Education

[student-debt]

Parents would rather see their children taught about personal finance at school than more traditional subjects such as history and geography, a survey showed today.

Money management skills was ranked as the fifth most important area children could be taught about, after English, maths, science and languages.

More than half of parents also said they thought their own financial situation would be better if they had been taught about money at school.

The study of 2,424 people by YouGov comes in the wake of widespread concern over spiralling consumer debt, which has topped the £1 trillion mark.

The Birmingham Post last year launched a campaign backed by business leaders calling for money management to be made a compulsory part of the curriculum.

In January, insolvency experts called on Ministers to make personal finance mandatory in the wake of a 57.1 per cent rise in individual debt in the last quarter of 2005.

Ministers have refused to force schools to teach finance skills despite tripling university tuition fees and encouraging more young people to enter higher education.

However, the Government is to launch a new personal finance qualification for 14 to 16-year-olds from September.

Annabel Brodie-Smith, communications director at AITC which conducted the YouGov survey, said: "Our research indicates parents believe money management is a vital skill for the next generation and it should be an important priority in schools.

"This is much more understandable when you consider that over half of parents think their financial situation would have improved if they had been taught personal finance at school."

The research found 40 per cent of people thought it was their own responsibility to educate their children on money matters, while 55 per cent said the task should fall to both parents and teachers.

Speaking to The Birmingham Post last year, Tony Blair expressed reluctance to make financial literacy compulsory, maintaining it would be wrong to put extra burdens on the curriculum.



For more information on student debt please visit student-debt.org

[jennifer]

Very good point raised by Student-debt. Another piece of news from Reuters said:
LONDON (Reuters) - Many Britons are vulnerable to an economic downturn and do not save enough for retirement, the Financial Services Authority said in a major report on Tuesday, as it launched a programme to encourage saving.

Members of the public, particularly those aged under 40, often have a loose grasp of financial risks and many are struggling with debt, the FSA said in a survey based on interviews with 5,328 people.

The FSA issued the survey, carried out by Bristol University, to coincide with a series of measures it is launching to raise the public's financial understanding.

The programme will cover about 10 million people in schools and workplaces over five years, FSA chief executive John Tiner told a news briefing.

Lack of financial understanding is identified by policymakers as a key reason why people, especially the young, are not saving enough for their old age at a time when citizens are expected to enjoy longer lifespans.

On one measure from the Pension Commission, there is a 57-billion-pound gap between what people save and what they should set aside for an adequate retirement income.

Among its findings, the FSA survey found that 70 percent of respondents had not taken any steps to cope with a drop in income, although 28 percent of respondents had experienced such a drop in the past three years.

Some 81 percent of interviewees who had yet to retire said a state-run pension would not provide an adequate retirement income. Yet 37 percent of them had not made additional measures to provide for their old age.

Lack of knowledge is particularly acute among young people, who now face an increasingly complex financial world, potentially heavy student loans as well as the attractions of products like credit cards that did not exist for earlier generations, the FSA's Tiner said.

"This combination of pressures means that the cost of not having the necessary skills to make sound financial decisions is becoming increasingly significant," Tiner said.

It is estimated that one percent of respondents -- equal to about 500,000 members of the UK population -- have fallen behind with many bills and credit commitments, while 3 million people have a constant struggle to sustain financial commitments.

Among investors in funds, some 40 percent of people owning a tax-advantaged portfolio holding equities do not realise it will fluctuate with the stock market, the survey showed.

The FSA will target schools and workplaces to boost financial education. While dramatic improvements are unlikely over the next few years, the FSA expects to see a steady rate or progress, Tiner added.



/Jenny