Debt problems ‘may continue without financial education’

A lack of financial education is a major reason for many Britons being in serious debt and this will continue unless the root causes of financial ignorance are addressed, an expert has said.

Founder of finance website Moneymagpie.com Jasmine Birtles argued the lack of understanding many people have of money is a prime cause of the current poor level of many people’s personal finances at present.

She commented: “One of the reasons why we are in such a terrible state debt wise is that we have ignored basic principles of money management.”

The solution to this is better financial education, Ms Birtles suggested, arguing the measures taken to provide this in schools so far are insufficient to meet the needs of the next generation.

She remarked: “There are a few bits and pieces that have been done by the government, but it is too small and too little too late,” suggesting when more money is available there should be increased investment in financial education provision.

Ms Birtles advocated advisors be made available by the government for both children and adults to offer financial instruction and training.

Meanwhile, evidence has emerged to suggest younger people are becoming increasingly prone to getting into bad debt.

Loan and credit card debt are among the main causes of a surge in requests for help from Citizens Advice made by under-25s in the year between April 2009 and March 2010.

The charity said the tally of calls received from this age group was 21 per cent up on the previous 12-month period.

By Amy White