Time to teach money in class

SCARCELY a week passes without a new development reminding the British public that they must expect to make provisions for themselves in future. They are urged to make safeguards for pensions, nursing- home care, mortgage protection policies in case they lose their jobs, and even medical and dental care if they want anything other than a spartan service.

The thrust towards self-reliance is irresistible, and the Labour Party is not threatening to roll it back. The lessons are being hammered home that this new duty to look after themselves does not apply only to pensioners, who are now expected to sell their homes if necessaryto pay for care. Nor does it apply just to working people in the prime of life, who are being warned that they must pay for pensions and insurance policies as well as school fees, mortgages and life's little luxuries to which they thought their age and status entitled them.

Thirtysomethings, and even twentysomethings, who are still more concerned with fun than finance, have been warned that they too must start saving for everything they expect to need for the rest of their lives.

Logically, they should know how to start providing for themselves from the first day they start work. But personal finance is not a simple science. In practice, it is an increasingly complex subject. It requires an understanding of economics, the effects of inflation and interest rates, the implications of taxation, and the risks and rewards attached to savings, to stocks and shares, unit and investment trusts, property, pensions, insurance and invest- ments - quite apart from an ever-expanding universe of individual financial products.

Relying on the advice of independent financial advisers, many of whom are paragons of virtue, but some of whom are not always as impartial as they might be, is not an acceptable option. Still less should customers be left to salesmen, who have a duty to understand their customers but are tied to a single supplier of the products they have to sell.

Standards are improving, but memories of scandals such as the mis-selling of personal pensions to people who should have stayed in employers' schemes or in Serps are still fresh. There is concern, too, over the efficiency of endowment policies in an age of low inflation and resistance to selling pressures is too strong to ignore.

The media have an important role to play in reporting, explaining and analysing the scene. Newspapers and magazines, in particular, are more important than television and radio if only because, on average, they have more time and space to devote to individual issues than vision or sound. But the media have a problem knowing how much to target their coverage at beginners or to assume a minimal level of initial knowledge and risk baffling novices with jargon.

The main task of making sure children leave school with as much knowledge of money as they have of sex must begin at school itself if the next generation is to stand a chance of making meaningful decisions for themselves. If knowledge is power, then personal finance should be taught at school, and not just as an optional extra but as part of the curriculum.