Educating Children Could Prevent Future Problems
Analysts are suggesting that parents follow the government’s lead and educate their children in financial matters, to prevent them falling into financial difficulties in the future. Integral to success is the understanding of your credit report, says credit reference agency Callcredit
The plans of the Government to help school children tackle personal finance issues are a step in the right direction, according to credit experts.
“Educating young people about taxation, credit card debt, how to buy a house and the importance of savings is key to their future success and financial well being,” said Director of Industry Relations at Callcredit, Melanie Mitchley.
“Currently, the UK’s debt mountain stands at over £1 trillion, with IVAs and insolvencies on the rise. By educating the next generation early and making them aware of these types of issues, the debt problem can be tackled.”
Experian’s Credit Expert conducted research into the level of debt in the UK, revealing worrying statistics which the School of Finance claims must be eliminated.
Five per cent of UK consumers resorted to an individual voluntary agreement (IVA) to cope with debt, while 9 per cent borrow from credit cards to pay off other debts. Whilst the majority of debt is actually in the form of mortgages on properties worth more than the secured loan held against it, there is still a vast amount of ignorance regarding loan debts and borrowing.
Education is necessary, because 24 per cent of people feel that financial issues too complicated to understand, with 80 per cent of people admit they regularly overspend.
“What this research seems to expose is a serious lack of understanding of the long-term consequences of these actions and how it can affect your credit rating - ultimately impacting your financial future,” said Jim Hodgkins, managing director of CreditExpert.