The Government says it will consider making financial education in schools compulsory as part of a wider education review later this year.

Similar plans were axed ahead of this year's general election that would have seen all youngsters taught about debt from September 2011 (see the Teen Cash Class guide).

MoneySavingExpert.com has long called for kids to be taught about credit and debt before they enter adult life to prevent financial problems.

Asked whether compulsory education is still on the agenda, a Department for Education spokeswoman says: "Yes, everything is still on the table. We are looking at the whole curriculum and we will set out steps next month ahead of a review."

That review should be complete by the end of this year, though any legislation is unlikely until well into 2011 at the earliest.

In a poll on this site earlier in the year, 97% of the 8,000 surveyed supported financial education in schools.

'No understanding'

News of the review comes as a report by schools regulator Ofsted found students in schools where financial education is not taught "do not understand basic concepts such as credit and debt".

The report added: "Students in the schools visited that were successfully developing personal finance education showed a good understanding of personal finance, used financial terms correctly and were able to apply their knowledge in making financial decisions."

Martin Lewis, MoneySavingExpert.com creator, says: "I've said it before and until we get financial education in schools I will say it again. We are a nation educated into debt when we go to university, not about debt.

"This is a national disgrace after all we've been through over the past few years because of irresponsible lending and irresponsible borrowing. It would be a national tragedy if we didn't grasp the nettle and finally make sure the next generation is financially literate."

Compulsory education axed

Plans for compulsory financial teaching in schools were dealt a devastating blow in April after measures to help youngsters learn about debt were dropped.

In a bid to rush through legislation in the Children, Schools and Families Bill before Parliament was dissolved ahead of the General Election, a number of components of the bill were shelved after the major political parties failed to reach agreement in time.

The stumbling block was over allowing parents to opt their kids out of sex education. This was a key part of Personal, Social, Health and Economic Education (PSHE), of which financial education was a part (see the Educated plans axed MSE new story).

As no agreement was reached on sex education, measures to make PSHE compulsory by September 2011 were dropped.

Further reading/Key links

Financial education: Teen Cash Class
Student loans MoneySaving guide: Student Loans 2010/11
Student finance guide: Student MoneySaving
Student loans tool: www.studentloanscalculator.co.uk
Student loan help: Should I pay off my student loan?