Children as young as five could be taught about personal finances at school

Children as young as five could be taught about personal finances at school - Children as young as five could be taught about personal finance at school under plans put forward by MPs.

They call for children to receive compulsory financial education lessons, including credit card interest rates and mobile phone contracts.

The group of 226 MPs and peers from the all-party parliamentary group on financial education for young people warn that unless the lessons are brought in, British youngsters face being plunged into debt within months of leaving school.

New lesson? Primary school pupils could soon receive education on personal fiances as part of the maths curriculum if a group of MPs has their way

The group’s recommendations will be considered by a review of the maths curriculum being carried out for Education Secretary Michael Gove.

The report comes ahead of a Commons debate about the issue on Thursday, secured after more than 100,000 people signed a petition by money expert Martin Lewis calling for financial education to be made compulsory.

Tory MP Andrew Percy, the author of the report, said: ‘Credit cards, mortgages, hire purchase agreements, mobile phone contracts, tuition fees and even supermarket offers all require us to apply functional maths skills, such as being able to calculate APR, compound interest and percentages, to real-life situations.

‘But too many of our school leavers, who can perform complex mathematical equations and algebra, have no idea what basic financial terms like APR and PPI mean - leaving them without the necessary level of financial literacy to make decisions in an increasingly complex financial world.’

He added that financial education would be a long-term solution to irresponsible borrowing and personal insolvency. ‘Furthermore, teaching people about budgeting and personal finance will help equip the workforce with the necessary skills to succeed in business and drive forward economic growth,’ he said.

Long-term solution: Andrew Percy said financial education would aid school leavers who can do complicated maths but do not understand some everyday financial terms

After their eight-month inquiry, the all-party group called on ministers to ensure school-leavers are better equipped to avoid running into money problems.

Financial numeracy should be taught within mathematics and ‘subjective aspects’ as part of Personal, Social Health and Economic (PSHE) education, it said. And every school should appoint a personal finance education ‘champion’.

Personal finance teaching is currently ad hoc, with only 45 per cent of teachers responding to a survey by the inquiry saying they had ever taught it.

Justin Tomlinson, the Tory chairman of the group, said: ‘People my age could get away with not being very good at money. But if the next generation make the wrong decision, it will come back and haunt them.’

Wendy van den Hende, chief executive of the Personal Finance Education Group, said: ‘Young people want to learn how to manage their money, and school is an excellent place for this to happen.

‘Teachers clearly want it to be part of the curriculum, so that it is taken seriously and has the support it deserves to be taught effectively.’

Mr Lewis, who is behind the MoneySavingExpert.com website, said: ‘We need compulsory financial education in our schools. Our nation is financially illiterate, for over 20 years we’ve educated our youth into debt when they go to university, but never about debt.

‘Breaking this cycle will mean less mis-selling, fewer bad debts, better consumers and could save the public coffers a fortune.’

More than 20 countries, including Japan and the US, teach personal finance in schools and it is now on the curriculum in Scotland. ( dailymail.co.uk )