16-year olds should manage own bank accounts
Parenting expert and author Andrew Watson has added his voice to those calling for young people to learn money management at an early age.
Mr Watson, who wrote a book for dads-to-be when his wife was expecting their first baby, suggests that allowing young people to make financial mistakes will help prevent them making more serious ones when they are older.
He says it could be beneficial for parents to allow their children to manage their own bank account when they reach the age of 16.
Teaching children to manage money is as important as reading, writing and arithmetic, he said, especially in the current economic climate.
Last month Simon Culhane, chief executive of the Chartered Institute for Securities & Investment (CISI), called for the government to give all 16 year olds a bank account of their choice, when they receive their National Insurance number.
With the use of online payment and transfers growing rapidly, Mr Culhane argues that mandatory bank accounts at the age of 16 would help young people understand personal finance at a much younger age.
His comments follow a debate in the House of Commons on a proposal to make financial education a compulsory part of every school’s curriculum.
The proposal, which was put forward by Conservative MP Justin Tomlinson, was supported by all political parties.
Research suggests that many people lack basic financial knowledge, with only 36 per cent of people understanding that the term APR relates to interest payments.
In the CISI’s magazine, Mr Culhane commented: “Financial education is too important to be tagged on as an also-ran; it should be fully integrated into the maths syllabus and tested”.
Mr Culhane suggested that a lack of financial understanding was contributing to the rapid increase in the number of people taking out payday loans with excessively high interest rates.