Better financial education could reduce the growing number of mortgage repossessions, says the IFS School of Finance.
The financial educational charity’s statement follows the Council of Mortgage Lenders’ figures which show that repossessions rose by 63 per cent to 17,000 in 2006.
It says a GCSE, A-level or A/S level in personal finance would teach people how to better manage their moneyIt says a study from the University of Manchester suggested that such qualifications were helpful in improving students knowledge and understanding of different mortgage products and the repayment implications for each option.
It is calling on the Government to ensure all schools and colleges offer their students qualifications in personal finance and allocate funding to schools specifically for financial education and incorporate financial capability into teacher training programmes.
Director of external affairs Anne Kiem says the rise in repossessions is cause for concern. She says: “Qualifications in personal finance have been proven to dramatically improve the financial capability of those that take them.
“If consumers know the pitfalls and understand the implications of the mortgage loan they are taking out, they are clearly going to be less likely to find themselves struggling to keep up repayments.”