School children to be given lessons in money management

School children will be taught about money in an attempt to halt the spread of financial incompetence, the Government will say today.

The £11.5million three-year My Money programme will show pupils how to draw up a budget, such as buying furniture for a new home without spending over a certain amount of money.

Other lessons could include how interest can quickly balloon on a credit card and how different types of mortgages work.

The scheme is part of a wider initiative from the Treasury and the Financial Services Authority, called the Financial Capability Action Plan.

It will also make legal advice for families at risk of repossession free at all county courts in England and increase awareness of debt advice charities. Financial incompetence is a subject of growing concern, amid growing levels of unsecured debt.

In 2006, the FSA warned that there was an entire generation with no savings, no pension and huge debts.

In the worst examples, adults could not understand a basic bank statement or were buying building insurance on a rented property.

And the availability of ready money to children is on the rise. Lloyds TSB recently came under fire for mailing debit cards to children as young as 11 without telling their parents.

Yvette Cooper, Chief Secretary to the Treasury, said: 'Many families are feeling the pinch as a result of high fuel and food prices, and the impact of the credit crunch on mortgage lending.

'But when people are facing money worries, they often don't know where to turn.

'We need to make it much easier for people to get access to information, help and advice.'