Financial education to become compulsory in schools

Financial education looks set to be introduced into schools in England.

A new draft curriculum has been drawn up that makes provisions for children to be taught about money management skills in key stages 3 and 4 as the government seeks to avoid today's youngsters running up debts in later life because of a lack of knowledge.

It is expected to be rolled out in time for the start of the 2014-15 school year and means that financial capability will be a statutory part of the curriculum for the first time.

Research by Credit Action found that typical household debt in the UK including mortgages was £53,867 in November 2012. On top of this, collective outstanding personal debt stood at £1.4 trillion.

These are the kinds of figures that the government is keen to tackle and so they have taken the decision to introduce measures in order to be able to so. Tracey Bleakley, chief executive of pfeg (Personal Finance Education Group), called the decision a "huge victory" for supporters of compulsory financial education.

"[It] is essential in equipping young people with the knowledge, skills and confidence they need to be able to manage their money well.

"With financial mathematics included as a part of maths and financial capability included in citizenship education for the first time, the campaign has achieved both of its objectives. We are delighted that ministers have listened on both fronts," she explained.

Justin Tomlinson, chair of the all-party parliamentary group on Financial Education for Young People, is also delighted by the announcement, as he believes it will make sure that future generations will have the appropriate skillset to look after their finances.

Ultimately, the measure should mean that fewer individuals require debt solutions in the future, as they will recognise the importance of staying on top of their situation. It comes after over 118,000 people signed an e-petition for financial education to be made compulsory.

By Joe White