Consumer Rights: We all need a good dose of financial education
The charity-run My Money Week, which starts on Monday, is a good way to begin learning
Saturday 01 June 2013
After decades of flexing the plastic, applying a 'buy now, pay later' model to shopping and ignoring the small print, we can hardly be surprised that many people have little understanding of how to manage their money. Budgeting to pay the bills when they come due, saving in advance to buy things we need or desire, putting money aside for the inevitable rainy day – why should any of that make sense to generations brought up on instant gratification and debt?
Our lax attitude to money, and our tenuous grip on the principles of its management, has left us vulnerable to a variety of scams, cons and get-rich-quick schemes. While many financial organisations have been guilty of irresponsible lending, applying pressure on consumers to borrow and engendering a 'have-it-now' culture, we're also partly to blame for our own money woes.
It's time to get a grip on our finances, sort out the debts and take responsibility for our financial futures. That's what lies behind My Money Week, which starts tomorrow in schools all over the UK. It is run annually by the charity PFEG – the Personal Finance Education Group.
But where do we start to reverse the trend? For many people, it's too late to save for a more comfortable retirement or avoid the health problems induced by deep, unmanageable debt. So we need to start at the beginning. Campaigns to have financial education added to the school curriculum have been running for years.
Research shows more than three quarters of the population believe young people should be taught financial planning in schools. If you want people to be savvy savers instead of thriftless spenders, you need to get them young and keep them on side throughout life. Financial education leads to financial literacy and capability, and in turn to financial well-being.
Financial illiteracy in the UK has over the years contributed to our current economic crisis and to pension, endowment and PPI mis-selling scandals, to name but a few. The PFEG equips young people with the knowledge, skills and confidence to see when they're being sold a pup and to manage their money well.
Our lack of financial know-how costs the UK taxpayer £3.4bn each year, according to the Centre for Economics and Business Research. If we had better money skills, fewer of us would be unemployed and living on benefits. We'd save up for our retirement and reduce the bill for the taxpayer by a third, and our personal debts would be lower, saving us money on interest payments. More money could be used to help fund small businesses, which would contribute to the UK economy, and we'd know better than to sign up to poor deals that leave us worse off. If the calculations included scams, fraud and the bill to the NHS because of poverty and mental health problems, the figure would be much higher.
Financial education is crucial for financial security for families and the economic well-being of the country. Financial education will be included in the compulsory national curriculum in England from 2014 when it will become part of citizenship for 11-16-year-olds. Citizenship education equips young people with the knowledge, skills and understanding to play an effective role in public life. Currently, pupils learn about their rights, responsibilities, duties and freedoms and about laws, justice and democracy but there's nothing covering personal finance. The final version of the curriculum will be with schools by September.
Pupils aged 11 to 14 will be taught the functions and uses of money, the importance of budgeting and money management. Those aged 14 to 16 will be taught about wages, taxes, credit, debt, financial risk and a range of financial products and services. But even with financial education on the agenda for schools, parents are the most influential people in their children's lives and financial education at home is important.
Many parents feel they don't know enough to talk to their children about money, but they don't need to be experts. If they do talk to children about savings, budgets, debt and peer pressure, it helps. Many aspects of responsible money management are best learnt in real-life, and schools can't deliver that. But lessons can also be passed from children to parents, and often what's learned at school can make a difference to how money is managed at home. Financial education can create winners all round. You can find out more about My Money Week at www.pfeg.org
Q: My boiler broke down, and had to be replaced. The company that installed it put pressure on me to take out insurance. I signed but now I'm wondering if I need it. It's about £160 a year, and I feel I've been pressurised into buying something I don't need. Is there anything to stop me cancelling? FK
A: Last year, a fifth of boilers broke down and cost on average £320 to fix, according to comparison site uSwitch.com. So having insurance could save you money. But you need to check what's included in the policy. Most cover repairs, parts and labour, unlimited cover and claims throughout the year, and an annual service. Some policies cover your whole heating system, most have exclusions. You may also have to pay the first £50 when you claim, or a £50 call-out charge. A good reason for cancelling your policy would be it your boiler is already covered under your home insurance. If not you may be able to pay a bit extra to get emergency boiler cover cheaper than you're paying for your standalone policy. You could put the £160 a year into a savings account and build up a 'self-insurance' fund. If you do decide the policy isn't good value, check the terms and conditions for the cancellation.
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
Nigel Farage promises Ukip will not 'stigmatise' would-be migrants – and says he wants 'everyone to speak the same language'
Ex-head of MI6: 'We shouldn't kid ourselves that Russia is on a path to democracy'
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
iJobs Money & Business
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...
Day In a Page
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads