Government backs school savings clubs

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The government is to fund savings clubs in primary schools in an effort to improve children’s understanding of personal finance.

A pilot version of the LifeSavers project, led by the Archbishop of Canterbury’s task group on responsible credit and savings, will begin in six church-linked schools this year and will be rolled out to about 100 schools over the next four years, the government said.

The initiative, in partnership with credit unions, is one of several aiming to educate children about how to manage their money and avoid debt problems later in life.

Three-quarters of adults in their twenties said they had made financial mistakes in their first years of independence, while 15 per cent said their debts had “spiralled out of control”, according to research in September by the Money Advice Service.

The statutory body has also published research saying that children form financial habits as young as the age of seven which can go on to inform adult behaviour.

Andrea Leadsom, economic secretary to the Treasury, said the new scheme would “help to tackle the root cause of money problems and develop good savings habits as early as possible”.

She said the clubs would also help to raise awareness of credit unions, community savings and loan organisations that the government and Church of England want to boost as alternatives to high-cost borrowing such as payday loans.

The project is receiving £150,000 of initial government funding and will seek help from parents, teachers and volunteers.

The plans involve children saving small, regular amounts of money and taking part in running the clubs as junior cashiers or bank managers, the Church of England said. This will be accompanied by teaching on topics such as managing money and the risks and emotions associated with money.

The archbishop’s task group is chaired by former Financial Services Authority chief Hector Sants.

Following a series of campaigns, financial education was added to the secondary school national curriculum last year. Private sector-backed initiatives such as pfeg and RedSTART also aim to provide sessions and resources on personal finance for children.

UK levels of household indebtedness are “moderate” but increasing, according to research last year by the University of Bristol. People in the UK owed £1.5tn in total at the end of October 2014, according to the Money Charity.

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