Learning how to manage your finances - a lifelong affair with your wallet

Financial education has been working its way to the top of the political agenda, as both the Government and financial companies themselves have been forced to take on board the fact that the fallout from a raft of mis-selling, including endowment mortgages and split capital investment trusts, a debt mountain and a haphazard approach to retirement planning, has left the financial industry with a blackened reputation and consumers confused about where to turn for financial help.

While more stringent regulation of the financial services industry has started to prove itself as the first bulwark against dodgy salesmen flogging even dodgier products, there is no substitute for a financially savvy consumer, who is able to judge for himself what he needs, and - as important - if he needs advice, where to get it.

The hard part is how to deliver appropriate financial education to the many and diverse groups that need it.

The City watchdog, the Financial Services Authority, has the statutory objective of promoting public understanding of the financial system. It is doing some sterling work in providing simple-to-understand guides including an online financial healthcheck, launched in June 2005, and a debt test, which first went online in January 2006.

Other initiatives from the FSA and others are taking financial education into schools and opening other routes to getting information and advice to those in need.

Among current programmes:

• Schools are being encouraged to sign up for the "Learning Money Matters" scheme offered by Personal Finance Education Group (PFEG).
• Nineteen universities now offer a "Money Doctor" tool kit to help students manage their money.
• Employees at a number of companies are being offered information packs and workplace seminars on financial issues.
• New parents are given "A Parents Guide to Money" to help them with finances and benefits on the birth of a child.

The FSA has also launched an Innovation Fund to provide seed funding for programmes to assist specific groups, particularly minorities. Aside from FSA initiatives, the Open University (OU) this year launched a part-time short course entitled: "You and Your Money: Personal Finance in Context".

The Government is also taking a lead by making sure that financial capability is embedded in the GCSE maths curriculum, although some campaigners feel that teaching finance as a separate stand-alone subject is a better way to promote true learning.

27 November 2006 © Moneyextra.com

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