Personal finance with Gill Oliver

Want to know how to manage your money? Just ask an 11-year-old. Starting from this month, all schools will have to teach children how to manage money by giving them lessons in budgeting and borrowing.

Along with maths, English and history, the curriculum will “prepare pupils to take their place in society as responsible citizens by providing them with the skills and knowledge to manage their money well and make sound financial decisions”.

That’s government speak for “we Brits are a bit hopeless with cash and most of us are in debt, so we need help to sort out our finances”.

Actually, they have a point.

According to The Money Charity, every five minutes someone in the UK is declared bankrupt and every 16 minutes a home is repossessed.

A survey by the Money Advice Service found that almost one in five under-35s think the Bank of England base rate for borrowing money is 10 per cent right now (it’s actually half of one per cent).

And one in six think there’s no point in saving for a pension until you hit your 50s.

The group of MPs who put together this scheme for schools warned that if nothing is done, the problem of debt and the misery that goes with it will get much worse.

So, from now on in the classroom, 11- to 14-year -olds will learn what money is used for, how to make it go further and how pensions and savings schemes work.

Between 14 and 16, they move on to wages, credit, taxes, debt and more complicated financial products.

This hasn’t come about by accident, it’s thanks to people like moneysavingexpert founder Martin Lewis, who has campaigned long and hard for children to be taught how to handle money from an early age.

Under-18s end up grappling with money problems from an earlier age than their parents, because of mobile phone contracts, credit cards and uni tuition fees.

A study found that 98 per cent of 11 to 17 year olds had money of their own and two thirds of 16 to 25 year olds are worried about getting into debt.

No wonder experts say it’s a good idea to teach kids about money from the age of four by giving them small amounts of pocket money and encouraging them to work out how much they have to spend and what they can get for their cash.

Once they move into their teens, they need to understand about credit cards and how if you don’t pay debts off quickly, it will rack-up interest, which can make the amount borrowed mushroom into something that is unaffordable.

As part of the lessons, youngsters will also learn about having a career and what it means to take a financial risk.

It will touch on different types of employment, including starting a business and what influences people to splash the cash.

So, good news when it comes to cutting our future personal debt but not so good for those advertising agencies and firms whose job it is to make us spend more than we can afford.

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