Need For Financial Understanding ‘has Never Been Higher’

Although thousands of Britons are taking steps to improve their financial understanding, more needs to be done to educate people on monetary matters, it has been suggested.

According to the Open University (OU), recent events such as the global credit crunch, “saving crises” and the effects of interest rate rises by the Bank of England over the last year make it more vital than ever for consumers to improve their financial literacy and understand how such occurrences can impact upon their spending. However, despite over 2,000 members of the public signing up for the institution’s You and Your Money: Personal Finance in Context course since last year, it was asserted that still more should be done to help get a better grip of managing their money situation.

And as a result of doing so, people may be able to develop a more responsible attitude towards personal loans and other forms of borrowing, which in turn may lead them to spend more time looking for competitively-priced credit.

Ian Fribbance, chair of the course and from the university’s social sciences department, said: “Just a quick glimpse at this week’s front pages proves that the need for financial understanding has never been higher. Consumers need to understand how changes to our economy affect them personally and the OU’s course can deliver this knowledge”.

“Over 2,000 people have already completed the course, which proves that our original promise to educate people about important financial issues, such as debt management, is working. This figure also highlights the British public’s overwhelming desire to gain a thorough grounding in financial matters as our economy faces some challenging times. Ultimately, it’s our aim for the course to better equip people to take a firm control of their own decision-making in financial matters.”

The course teaches attendees about how changes on a global or national scale can affect their personal finance situation, as well as the need to manage their money effectively if raising a family or caring for an older relative. In addition, borrowers will also be taught financial planning skills incorporating budgets and balance sheets, which could help them manage their regular outgoings and identify how much they have available to make loan repayments.

Overall, the improvement of financial knowledge could help Britons become more proactive in handling their money and so avoid developing unmanageable debt difficulties. The news comes as research carried out by Citizens Advice has revealed an increase in the number of enquiries dealt with relating to fiscal matters.

According to the advisory service, the proportion of consumers looking for advice on their struggles to manage money has increased to 1.7 million over the course of last year, as the company reported unsecured loans are “dominating” the country’s finance problems. Meanwhile, enquiries regarding personal loans are up by over 18 per cent. The study also showed that debt concerns in relation to electricity and gas bills have surged by a third, with enquiries surrounding telephone bills witnessing growth of 19 per cent. Consequently, those concerned about how much they owe could be well advised to consider taking out a debt consolidation loan as a means of paying off existing debts to various creditors and getting back on their financial feet.