Parents ‘passing on debt message’
Parents are keen to speak to their children about debt and help make sure they avoid running into money troubles, research has shown. Amid growing concern about debt, it would appear mums and dads across Britain are keen to impart their knowledge about mortgages, credit cards, unsecured loans, savings and investments.
Britain has a combined personal debt mountain of more than 1 trillion pounds and with the credit crunch having brought the era of cheap money to an end, many people will face a harder time meeting their repayments. Research by Engage Mutual Assurance, a financial services provider, revealed that financial advice was a top priority for parents, coming in ahead of sexually-transmitted diseases, racism and health issues.
Almost two thirds (64 per cent) of parents had spoken to their children about debt and around the same number (62 per cent) had given them advice on saving for the future. This means that personal finance ranks right up there with drugs and alcohol (78 per cent); personal hygiene (74 per cent); talking to strangers (73 per cent) and ‘the birds and the bees’ (71 per cent).
“The fact that so many parents are prioritising talking to their children about money is a reflection of the increasing strain families are finding themselves under to make ends meet,” said Karl Elliott of Engage Mutual Assurance. “It is encouraging that so many parents are choosing to talk to their children about money.
“The needs of the modern family are changing, and it’s important that children are prepared for the financial pressures of adulthood,” he added.
While a slightly higher proportion (65 per cent against 63 per cent) of dads were keen to talk about? debt with their children, it seems mums are more likely to get the job of broaching the subject of money in general. They are also the ones who usually get the embarrassing topics to deal with.
This news will be encouraging for the government and campaign groups that have called for action to inform young people about managing their money. Some schools have already introduced classes to teach their students about basic personal finance, but organisations like the Personal Finance Education Group (pfeg) want to see this trend go further, with the introduction of a new GCSE. pfeg, which is funded by the Financial Services Authority (FSA), provides schools with expert advisers to help teachers run personal finance classes.
The FSA itself could soon be taking more of a lead in providing advice about financial products, following the release of a government-commissioned report that recommends the regulator run a new Money Guidance service. Money Guidance would provide information and help for people struggling to manage their finances, but would not recommend specific products. It is hoped that the service can help people make the most of debt consolidation loans, balance transfers and other measures that can help resolve money worries.
It is not only young people who could potentially benefit from such a loan, however. Engage Mutual Assurance also released research in December emphasising the degree to which unmanageable debts can put strain on a relationship highlighting the need for improved money management in many sectors of society.
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