PF education could make kids £32,000 richer

Classes on personal finance and budgeting in schools could make children richer by up to £32,000 between the ages of 35 and 49, suggests research.

The Institute for Public Policy Research (ippr) has highlighted evidence from the US where children are taught basic financial skills including budgeting, credit management, balancing chequebooks, compound interest and other investment principles.

The research suggests financial education has led to people being richer by on average a year’s earnings between the ages of 35 and 49.

According to the ippr, in the UK this could mean:

• A couple with two children aged five and 11 could be better off by about £32,000;
• A couple with no children could e better off by about £22,000; and
• A single person with no children could be better off by about £13,000.

The study comes ahead of new course units in financial education which will be taught in schools for the first full year from September 2006.

From September 2010 basic financial skills will be taught as part of the functional maths GCSE.

Gavin Shreeve, chief executive of the ifs School of Finance, states: “We welcome the ippr report which provides yet more evidence that millions of adults have difficulty managing their finances and that financial education in schools would improve the situation. Proper financial education in schools is essential in tackling this problem and we hope policy makers take note of the findings of this report.”

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