Education is 'armour' against deceptive advertising - MPs

Education can provide “armour” against financial mismanagement and misleading advertising, MPs said yesterday.

In a backbench debate on financial education for the young, MPs said education holds the key to preventing a generation of children slipping into financial mismanagement amid soaring levels of individual insolvency.

The debate, led by Conservative MP Andrew Percy, was triggered by a motion calling for financial education to be included in the national curriculum to help address the problem of irresponsible borrowing and personal insolvency.

MPs said misleading advertising is at the heart of problems some people are getting into, including taking out short-term loans and pay-day loans.

"Education is armour against being misled and we are being misled with advertising," said Labour MP for Darlington Jenny Chapman. "I want to curb advertising on financial products."

She said poor levels of education have resulted in widespread financial ignorance, with more than a third of people lacking skills to manage cash. Chapman pointed to research suggesting 43% of parents do not understand basic terms such as PPI.

The provision of financial education in schools is ad hoc, said Chapman, who pointed to the lack of a statutory mandate.

She warned a new generation are in danger of falling into lasting debt problems.

"Young people now are in danger of financial mismanagement having a long term impact on their lives. An informed borrower is a safe borrower."

Conservative Member for South West Norfolk Elizabeth Truss told the House the UK has the smallest proportion of 16-18 year-olds taking A level Maths than any country in the OECD.

Another MP said lack of financial education is acting as a brake on entrepreneurism.

Champman, meanwhile, said a "whole pack of measures" is needed to address the debt problem - including regulation of pay-day loans, advertising curbs and better provision of advice.

She also called for a champion of personal finance to be appointed.

Education minister Nick Gibb said the government is currently conducting a review into the national curriculum and personal social health and economic education.

The impetus for yesterday's debate came from an e-petition calling for financial education to be included in the national curriculum. The measure has also been recommended in a report from the All-Party Parliamentary group.