IFS stresses importance of financial education
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The IFS School of Finance says UK consumers are in desperate need of financial education, after research found that over 80% regularly overspend.
As part of credit awareness week, Credit Expert (Experian) revealed figures that show over 80% of Britons admit to regularly overspending and that millions of us are driven to consider last resort measures such as bankruptcy.
Key statistics in the Credit Expert research showed that 5% of the population have considered or taken out an IVA or declared themselves bankrupt, 9% have taken out a credit card to pay off debt on another credit card,10% have missed payments on credit cards, store cards, loan or mortgage repayments and 24% of Brits admit to finding it hard to control their spending and claim financial matters are difficult to understand.
Jim Hodgkins, managing director of CreditExpert.co.uk, says: " What this research seems to expose is a serious lack of understanding of the long-term consequences of these actions and how it can affect your credit rating - ultimately impacting your financial future….we feel it's imperative that people fully realise the implications of not managing their finances properly.”
Anne Kiem, director of external affairs at the ifs School of Finance, says: “The aim of these GCSE equivalent qualifications is to provide allyoung people with the ability to make informed financial decisions.
“The research from Experian again highlights the fact that the British population is in desperate need of such education.
“The ability to make informed financial decisions is a crucial life skill for all; no matter what income, class, background or type of career you may wish to pursue.
"It should therefore be possible for all young people to have the opportunity to gain such skills and we hope the government will soon recognise this.”
“Simply raising the status of the subject in this way would lead to a step change in the number of young people leaving school equipped to make informed financial decisions.”
“Whilst committed to equipping future generations with the skills to avoid debt, we recognise that there are millions of adults who lack basic financial management skills.
"As a result we will be launching a personal finance qualification - the Certificate in Financial Planning - for adults in September 2007.
“This qualification has been specifically developed to address the five key components of managing personal finance identified in the Financial Services Authority’s baseline survey 2006: making ends meet, keeping track of finances, planning ahead, choosing financial products, and staying informed about financial matters."
