Money Insider: Financial education is a crucial life skill

We repeatedly hear calls for children to be taught more about personal finance matters at school, yet we seem no nearer to getting it included as part of the national curriculum.

Some people in Westminster may not see this as a priority, but a quick look at the latest statistics released by Credit Action underline the scale of the financial problems consumers are currently facing in this country.

The latest numbers are scary, revealing that on average, every day 334 people are declared insolvent or bankrupt and 8,910 new debt problems are dealt with by Citizens Advice Bureau. While some of these situations will arise due to circumstances beyond the borrower's control, there are certainly cases that could have been prevented if people understood a little more when it comes to money matters.

These are challenging financial times for people of all ages, so the more our children learn about managing their money the better. While a handful of schools have taken the matter seriously and are teaching pupils about money, the vast majority don't do anything.

There were plans by the Labour government to make financial education compulsory but these failed to go through in time for the last general election; however there is hope that the coalition will pick up the baton and finish the job.

The sooner our children start learning these essential life skills the better, whether it ends up as a bolt on to mathematics or a standalone subject, we can't afford to sit back and do nothing.

After all, debt is now the norm for young people, especially students, and they have to learn how to control it and not make the same mistakes as their parents. It is essential that young people leave school and understand the dangers associated with credit cards and payday loans and enter adulthood with the knowledge and confidence to manage their finances.

It is never too early to start educating children about money – most will be receiving pocket money before they reach 10 years of age – so even at this stage there are opportunities to explain the advantages of budgeting and saving to buy something.

Money plays a pivotal part in our lives, whether it's buying a first car, a home, paying for our children's university education or putting enough cash aside to provide for our retirement.

Unlike their parents and grandparents, today's youngsters won't be able to rely on making huge profits out of house prices or have the luxury of final salary pension schemes and many are likely to have to work until they reach 70 years of age.

Teaching children how to handle their money has never been more important, and it's vital we make a start now rather than risk adding to those miserable debt statistics.

Better news on personal loan rates but only for larger sums

it's not just the high-street retailers that are doing their utmost to encourage consumers to keep on spending; the banks are also doing the same with some lower personal loan rates on offer as we enter the final quarter of 2011.

The Government would like to see the country spend its way out of recession, but the current economic woes and prospect of more job cuts doesn't really provide consumers with much of an incentive. Therefore news of lower loan rates will be music to the ears of the Chancellor and his team.

In the last few weeks we have seen Tesco Bank, HSBC and Nationwide Building Society all cut rates on their personal loans above.

With the cost of living increases eating into consumer budgets, lenders have to offer more attractive rates to stimulate the loans market.

It is also probable that some lenders are falling behind the targets they set themselves at the beginning of the year and are trimming rates to try to boost the take up.

The best rates currently available are 14.9 per cent APR for £2,500 from Post Office, 7.9 per cent APR for £5,000 from Sainsbury's Finance and 6.4 per cent APR for a £10,000 advance from HSBC, Marks & Spencer Money and Nationwide BS.

The main downside is that lower interest rates are not generally available for smaller loans, so for anyone looking to borrow a sum of £2,000 to £3,000, the interest rate will be well into double figures and in some cases pushing 20 per cent APR.

Smaller loans may be considered less profitable and historically a greater risk, however if consumer spending is to remain strong throughout the remainder of this year then lenders need to do their bit by offering cheaper interest rates across the board.

Andrew Hagger is an analyst at

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

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