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Financial education 'needed in Britain'

By Sarah Engle, Mon 1 Mar 2010 - Published in Banking

There needs to be more financial education in the UK, an expert has suggested.

Ed Bowsher, head of consumer finance at lovemoney.com, said there is a "crying need" for more awareness of financial affairs and this could help to reduce the amount of debt accumulated by Brits.

"I fear that many people with overdrafts just don't understand the damage a 19 per cent interest rate can do. Schoolchildren should be shown how your finances can quickly spiral out of control," he commented.

In addition, Mr Bowsher pointed out that people can improve their financial affairs by keeping a spending diary to record all their outgoings during the month and identify where savings can be made.

He also claimed that allocating a monthly allowance for non-essential spending such as going out can be an effective way to prevent money from being wasted.

Recent figures from moneysupermarket.com showed that five million Brits live permanently in their overdraft, but many could save £240 a year by switching to a banking account with more favourable interest rates.