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Financial education required to tackle high levels of personal insolvency

21 October, 2015

Financial education specialist ifs University College has called on policy makers to place a greater emphasis on structured financial education in schools, to combat high levels of long-term bankruptcy and personal insolvency among consumers.

Figures published today reveal that there were nearly 21,000 individual insolvencies in the first three months of 2015 alone, with more than 4,000 bankruptcies, 6,000 debt relief orders and nearly 10,500 individual voluntary arrangements recorded[1].

But, according to ifs University College, harmful attitudes to debt set in during childhood, with five per cent of teenagers aged 18 or under saying they have already encountered debt problems.

Commenting on the figures, Alison Pask, Vice Principal at ifs University College said:

While it is encouraging to see a long-term decline in the overall numbers of personal insolvencies recorded, the figures released today remain stubbornly high and highlight the fact that the issues stemming from high levels of personal indebtedness have never really gone away.

“In today’s finance-orientated society to go bankrupt or be declared insolvent is highly damaging and often stems from a lack of financial understanding, whereby had effective financial education been introduced earlier, these problems could be avoided.

“Problems with debt often set in early and we must consider the example we are setting to the next generation and take the relevant steps to prevent them.”