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EDUCATION


While we are seeing a distinct lack of basic financial education in schools, business initiatives seem to be moving ahead in great strides, but is this a dangerous disparity? David Burrows asks:


Do financial literacy and business go hand in hand?


A


RE WE BECOMING a nation of financial illiterates? Given the disturbing level of consumer debt in the UK and general ignorance about money, the answer would


seem to be a resounding ‘yes’. TV programmes like Spendaholics and The


Bank of Mum and Dad would indicate that the younger generation like to spend rather than save, which – for a nation that already has one of the worst consumer debt levels in Europe – doesn’t bode well for the future. So should we do more to teach children


about financial literacy? Paul Richardson, Certified Financial Planner with Concept Financial Planning certainly thinks so. He spoke to a group of sixth form students in Surrey about managing money and was alarmed at how ill-equipped they were to deal with going away to university and taking the first steps into financial independence. “They were aware of the easy availability of money via loans and credit cards but had no


58 businesslife.co February/March 2012


idea about budget planning,” Richardson explains. “Their philosophy is to live for the moment and not to think too seriously about how and when this money is paid back. Their perception of interest charges of 20 per cent- plus and how this would dramatically affect what they repaid over the long-term was sketchy to say the least.” Despite earning less than any other age


group, the younger generation are continuing to spend their way into debt while trying to maintain a lifestyle beyond their means. According to recent figures from debt advice specialists Clear Debt, the average level of unsecured debt for young people aged 21 and under is almost £9,000. The debt level of 18- to 21-year-olds in the UK is 91 per cent of their take-home salary, and 37 per cent of those with debt problems in the UK are under 30. Richardson adds: “There is a massive need


for education in the classroom – and the earlier the better. From small children understanding how long it takes to save pocket money for a £5 toy, to teenagers understanding borrowing and


loanscredit


debts


30%


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