Schools Shake-up Fails to Learn Lessons from the Past

The government is preparing a generation to fail by ignoring the need for compulsory financial literacy in its proposed education reforms, according to one industry expert.

Sara-Ann Burgess, the managing director of independent specialist protection insurer Burgesses, is alarmed that there is no mention of pupils having to learn about day-to-day financial matters such as interest rates and mortgages.

"I find it incredible that at a time when the economy is rapidly going down the drain that the interim report makes no mention of any formal requirement that pupils be grounded in the essential financial knowledge they will require when they eventually move into work and onto the property ladder.

"Part of the reason why the country is in such an economic mess at the moment is that many people did not understand the consequence of their actions when they maxed out their credit and store cards, oblivious to the fact that high interest rates would put them in extreme financial difficulties if they could not make full repayments each month.

"Financial ignorance made some people easy prey for loan sharks and that in turn lead in many cases to familial breakup and all the social welfare issues that go hand-in-hand with this that create a drain on the public purse, and ultimately undermine fiscal policy.

"And it is not just an 'underclass' that has suffered from financial ignorance. Many so-called educated people have fallen victim to boiler room or Ponzie schemes because they did not possess the financial know how to see through the sales patter and lost a lot of money."

Under the proposals presented to the Schools Secretary Ed Balls, some subjects will be lost to be replaced in the curriculum by lessons deemed more inclusive and true to life.

But Burgess argues that without a strong grounding in basic finance tomorrows consumers will simply be fodder for unscrupulous product providers and dodgy brokers and bankers.

"Those who fail to learn the financial lessons of the past are condemned to repeat them in the future. If we really want to create a new inclusive financial world order we must start by arming people with the knowledge that equips them to make the best choices about their financial well-being," Burgess added.

"We do not want to see a return to a time when lenders took advantage of customers by flogging them single premium payment protection insurance when much cheaper cover was available but consumers lacked the knowledge to calculate that they would save hundreds of pounds by simply going to an independent provider like British Insurance."