Financial education 'improves in credit crunch'

03/03/2009

Britain's children are being taught more about personal finance than before, thanks to the recession.

This is the main finding of a new report from The Co-operative Bank - which showed that 51 per cent of parents are teaching their offspring about the downturn along with helping with homework and bedtime stories.

The global credit crunch has made mortgages and other loans harder to come by for consumers and businesses - and officially put the UK into recession at the end of last year.

Unemployment is on the rise and house prices have plunged, putting severe pressure on household budgets.

Kevin Still, EuroDebt director, said: "It is inevitable that children will become more savvy with regards to some of the financial pressures that their parents are experiencing, though this may not be beneficial to many of the creditors that the parents have agreements with. Long memories of bad experiences with lenders in difficult times are likely to be carried from one generation to another."

The Co-op also found that 62 per cent of parents feel that it is "important" that their children know more about the economic situation.

A similar number (64 per cent) said that savings and investments need to be a particular focus for the financial lessons.

Kevin Still added: "It is beneficial for children to understand the importance of budgeting and prioritising expenditure, even if this means sacrificing treats or 'must have' accessories. These may be valuable lessons in tough times. It may also be a salutary lesson in shopping around for the best deals and how credit fits into the purchase of desirable goods like mobile phones, laptops, electronic gadgetry and further along, your first car or property. It is very easy to get lured by the goods or services that you purchasing and not the underlying APR."

Tags; Budgeting Advice, Young Family Finances,

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