EDUCATION ON personal finance should form part of the compulsory school curriculum, according to a new report.
Existing instruction in personal finance in schools is ad hoc and incomplete, the National Steering Group on Financial Education says, and is based on the priorities of individual organisations rather than an overall design.
The group, which includes representatives of the Financial Regulator, Government departments and education and curriculum bodies, says the current economic crisis shows the importance of personal finance education for the wellbeing of citizens and the wider society.
“We believe that personal finance education sits alongside effective regulation as a consumer protection measure but is not a replacement for a safe and fair market,” the report states.
The report also sets out the framework for such an education programme, in the form of the building blocks of a proposed curriculum.
Funding to develop programmes to train people of all ages to become more financially capable is to be provided from the Government’s recapitalisation and guarantee schemes, under terms agreed with the banks last year.
Minister for Finance Brian Lenihan yesterday welcomed the report and its proposals as the best use of existing resources. He promised the co-ordination of education programmes would be an important priority in promoting the interests of consumers.
The task of implementing its recommendations is likely to fall to the new body to be formed from the amalgamation of the National Consumer Agency, the Competition Authority and the consumer information section of the Financial Regulator.
However, legislation setting up this body is unlikely to be passed until next year at the earliest.
Research carried out for the group shows that about half the population is considered financially capable, while the other half displays weaknesses in managing money, planning ahead, choosing financial products and/or staying informed about financial matters.
Most people claimed to be good at managing money but did not keep records. Under-40s were particularly poor at planning.
Acting Financial Regulator Mary O’Dea admitted it was “a bit of an irony” that more emphasis was being placed on personal financial education when the nation’s collective finances were in such a bad state. “The unprecedented financial events of recent years have served only to reinforce our view of the need for a comprehensive policy addressing personal finance education.”