In the past five years, British debt has almost doubled. According to Datamonitor, a market analyst, the average debt held by each adult in Britain is pound;4,500, which is set to rise to pound;5,740 by 2008. With debt fast becoming an inevitable aspect of UK culture, teaching children how to manage their finances has never been so important.
Since August 2002, financial literacy has been included within the new foundation subject of personal, social and health education (PSHE) and citizenship at key stages 3 and 4. The framework for PSHE provides for personal finance education throughout key stages 1-4 and stipulates that students should be taught how to become competent at looking after their money, focusing on how money can be spent and saved, how to use a range of financial tools and services and - through citizenship - consumer rights and responsibilities.
But a recent survey of 16-year-olds by the Royal Bank of Scotland suggests children are still not confident about managing their money. Despite the fact that the average 16-year-old earns pound;1,000 a year from part-time jobs, almost half do not know the difference between a credit and debit card and 57 per cent do not know the length of the average mortgage.
"Life is increasingly complex for young people," says Wendy Van Den Hende, chief executive of the Personal Finance Education Group (PFEG), an organisation that promotes financial education. "They are more likely to go into higher education, have a number of jobs, live longer, work longer and have longer retirements. During their lifetime, they may have a range of experiences - running a household, a divorce or a bereavement - so they need to be well prepared."
A study of 63 schools by Lisanne Mealing, director of a firm of financial advisers, showed that only a third had a policy for personal finance education. Of the schools polled, 38 per cent said it was a low priority and 13 per cent didn't consider it at all. Teachers at 18 out of 61 schools said they had low confidence in their knowledge of financial products, something Kelvyn Curry, director of the NatwestRoyal Bank of Scotland Financial Capability Centre at the University of Warwick, is all too aware.
"We understand that teachers are not necessarily financial experts, which is why we've devised a range of resources for them to use across the curriculum," he says.
The Natwest Face 2 Face With Finance website enables teachers to access and print free education materials to use with students in the classroom, and can be ordered online. The materials teach personal money management and enterprise for 11-19 year olds and are accompanied by a curriculum guide that shows how the materials link to subjects, age groups, key skills and key words.
Teachers can also take the opportunity to work alongside banking staff who will visit schools to deliver finance education. Topics include basic banking, cards and card services and "Credit Worthy?" - an activity that aims to encourage students to manage their money by posing as borrower and lender.
The PFEG has recently been praised for its Excellence and Access programme, a pound;1.9 million government and industry backed project involving 300 secondary schools. Supported by a wide range of organisations involved in money issues, including HSBC and Barclays, projects ranged from planning units of work with personal finance content to enrich the mathematics curriculum in Rochdale, working on coin recognition and basic shopping activities with students with severe physical and learning difficulties in Sunderland, and making a TV soap opera as the medium for exploring views and solutions to a range of financial issues in Hull.
The charity's website includes extended case studies and lesson plans and a 10-minute video illustrating the innovative ways a number of schools have taught personal finance education. It also includes good practice guides on developing financial capability in key stages 3 and 4, 16 to 19 year-olds, and includes more specialised guides, aimed at working with gifted and talented learners. The website also includes Quality Mark - recommended resources from other sources that are free and downloadable.
The Financial Services Authority (FSA) works with schools and colleges to support teaching and learning in many curriculum areas, but with a focus on citizenship and PSHE, using education for financial capability as a context for mathematics, numeracy and ICT. Its website contains downloadable resources for teachers and parents to help children with finance education.
Organisations point out that financial literacy need not be confined to PSHE and citizenship.
As Ms Van Den Hende puts it: "There are many creative ways to teach children how to manage their finances across the curriculum. At the end of the day, children are interested in money, so they will respond well."
www.natwestf2f.com; tel: 024 7652 4234
www.pfeg.com FSA: www.fsa.gov.uk