Financial capability, financial inclusion, financial awareness.

Whatever term is used, it means financial education. Although very much in its infancy, it is certainly taking off, and not just in Scotland.

The subject is expected to be in the curriculum in England by 2007 (though not compulsorily, as wrongly reported) and the Financial Regulator in Ireland called two weeks ago for personal finance to be taught in schools.

Research carried out by the Prudential revealed that 15 per cent of 18-to 24-year-olds think an ISA is an iPod accessory and one in 10 think it is an energy drink. A survey by the Edinburgh-based investment managers Baillie Gifford found that almost three-quarters of 16-to 18-year-olds said they had learnt nothing about handling money at school.

“There is a desperate need for financial education to be taught as part of the curriculum,” Ian Bruce, campaign manager at Baillie Gifford, said.

“With more and more responsibility being placed on the individual to provide for themselves through life and in retirement, we need today’s school leavers to have a real understanding of money.”

Factors such as student debt and the pressures on first-time house buyers mean that people are having to make complex financial decisions at a relatively young age, Mr Bruce added.

There are signs of a receptive market. The recent YouthLink survey report, Being Young in Scotland, showed that 81 per cent of 17-to 25-year-olds disagree that it is OK to have lots of debt and 48 per cent even agree that planning now for retirement is important.

Scotland was quick off the mark with the nuts and bolts of an education framework. Learning and Teaching Scotland set up the Scottish Centre for Financial Education some years ago, after the former curriculum council stated in 1999 that “all young people should have opportunities to acquire a broadly-based financial capability”.

The finance industry, notably the Royal Bank of Scotland, quickly came on board.

The final component was the commitment of politicians. In Scotland, at least, this is being particularly driven by the wider agenda to “close the opportunity gap”, using financial education in the fullest sense to ensure the most vulnerable families avoid the debt trap.

Earlier this month, Tom McCabe, the public services minister, launched a debt awareness pack aimed at third year pupils in North Lanarkshire’s 26 secondary schools as part of their personal and social education.

Michael O’Neill, the council’s director of education, said: “The management of money is key to quality of life and this course will equip young people to deal effectively with the range of financial challenges which they will face either now or in the future.”

Mr McCabe said the aim of the Executive’s support for financial education, which it is backing with pound;1 million a year, is to help young people deal with the choices and consequences of financial decisions, whether it be taking out a student loan, considering a mobile phone plan or starting up a savings account.

Peter Peacock, the Education Minister, also signalled his strong support in a parliamentary written answer this month and then said: “We will ensure that cross-curricular issues such as citizenship education, education for sustainable development, enterprise in education, creativity and financial education are reflected in new guidance.”

Several local authorities have signed up to take financial education forward. In addition to North Lanarkshire, Dumfries and Galloway has kicked off a three-year programme of continuing professional development for teachers, as has Renfrewshire.

Glasgow secondary schools are about to embark on an audit to see what financial education exists - and therefore what teachers’ CPD needs are - as part of a broader financial awareness strategy in a city where 116,000 people are said to be “economically inactive”.

The needs of the economy is, inevitably, the other driving force behind financial education. The interest of Careers Scotland in today’s national conference on financial education, which it organised with the Scottish Centre for Financial Education, lies in the fact that 10 per cent of the Scottish economy is accounted for by the financial services sector, generating 200,000 jobs. Scotland therefore needs “a highly financially capable workforce able to compete locally and globally,” it says.

The work has just begun.

CASH CONCERNS

Why financial education?

* Total UK personal debt has increased from pound;609 billion to pound;1,122 billion in the past five years.

* An average of 23 Scots go bankrupt every working day.

* Citizens Advice Scotland handled 50,000 enquiries on debt in 2004.

* Student expenditure at university is estimated at pound;34,000 over four years.

* 11 per cent of adults in Scotland have no bank account.

* Up to a third of households with income under pound;15,000 are in arrears with credit or bills.

* The biggest cause of rows within relationships is not infidelity but money, according to Relate.

RESOURCES ALREADY AVAILABLE

* From Learning and Teaching Scotland: Talk Money, Talk Maths for S1S2 Facing up 2 Finance for S3 and S4 Financial education in Scottish primary schools: Building on existing practice Financial education in Scottish secondary schools: Education for personal and social development

* Royal Bank of Scotland Face 2 Face programme for schools

* Colossal Cards school pack from the Financial Services Authority

* Scottish Enterprise ‘Get Ready for Work’ pre-Skillseekers programme

* Enterprising Global Citizen course led by Unicef

* Young Scot’s financial services helpline for 16-to 26-year-olds, tel 0808 8010 338