CII calls for financial education improvements

These days, people’s personal finances can be complex affairs. Often, people manage a combination of current accounts, savings, loans, investments and so on. Among the products that are rising in popularity are guarantor loans. Such no credit loans can help people who struggle to access credit from banks and they can enable individuals to engage in home improvement projects, take holidays, pay for weddings, fund education and so on.

However, new research has suggested that unless youngsters improve their understanding of finance, they may not be able to make the most of the best options out there.

According to a study conducted by the Chartered Insurance Institute (CII), 95 per cent of 16 to 18-year-olds polled had debit cards, but one quarter did not know what the term ‘debit’ meant. Also, one in five respondents within this age bracket had store credit cards despite the fact that a third did not understand what ‘credit’ meant.

Furthermore, it was discovered that 71 per cent of such individuals did not know the meaning of ‘APR’.

Without grasping these ideas, youngsters may find it hard as they move into the adult world and start making decisions about their money. For example, they might not understand how best to utilise no credit loans such as guarantor loans.

It was also found that one in three teachers surveyed did not believe that financial education is being taught to a high standard within schools in the UK.

Responding to the statistics, the CII’s David Thomson said: “Our research demonstrates the relatively low profile that financial education has on the curriculum, despite teachers realising its inherent importance as a life skill and one that will arm young people with the necessary skills to navigate these challenging economic times.”

He added that teachers responsible for delivering material of this kind need to be fully supported.