A massive All Party Parliamentary Group (APPG) on Financial Education for Young People launches today.

Over 120 MPs from all parties have joined, making it one of the largest APPGs ever (see the Teen Cash Class guide).

Their call is for compulsory financial education in schools, ensuring young people understand money, consuming and debt.

It has formed in response to the debt-ridden financial crisis and rise in tuition fees.

The APPG's chair is Conservative MP Justin Tomlinson, and it's backed by the Personal Finance Education Group (pfeg) and MoneySavingExpert.com.

In fact, over 97% of 8,000 polled by this site last year supported teaching financial education in schools, while over 30,000 people signed financialeducationpetition.com.

Another 5,000 people are estimated to have written to their MP this month asking them to support the group.

Big bank support

Big name supporters of the group include financial giants Aegon, Barclays, Capital One, HSBC and Nationwide Building Society; and consumer groups Which?, Citizens Advice and the Consumer Financial Education Body.

Tomlinson says: "Young people are entering an increasingly complex financial world of store cards, mobile phone tariffs, credit agreements and financial marketing.

"Through my MP casework, I have seen first-hand the implications for those who have made poor decisions, too often through a lack of understanding.

"I am passionate that financial education's the best way to equip all young people with the relevant skills to make informed decisions and empower them as consumers.

"I have been working hard to secure cross-party support to help champion this cause, so the next generation is equipped to confidently address the financial challenges ahead."

Full lists of MPs who support APPGs are not routinely published, as is the case here. Many ministers are not allowed to be members of APPGs.

Past plans axed

Compulsory financial education in schools was on the Labour government's agenda. Youngsters would have been taught about debt from September 2011 but legislation could not go through in time before last May's general election.

Martin Lewis, MoneySavingExpert.com creator, says: "It's a national disgrace that in the 20 years since student loans launched we've educated our youth into debt, but never about debt.

"Now, as tuition fees are getting bigger and some will pay commercial rates of interest for them, we simply can't let students take this debt out unless they know how it works.

"What's deeply frustrating is while virtually everybody agrees it's needed and people often say 'I wish I'd had it', making it happen is a nightmare.

"That's why this co-ordinated effort is so exciting. After all, as a financially illiterate nation, it's not enough to rely on parents. Schools are the key to breaking the debt cycle leading to less mis-selling, fewer bad debts, better consumers and could save the public coffers a fortune."

£16,000+ debts

The need for better education is highlighted when you consider the average household with debt owes £16,336, excluding mortgages.

Meanwhile, 68% of students surveyed by Royal bank of Scotland couldn't correctly identify the cheapest loan and only 23% expected to owe more than £20,000 after university even though higher sums are typical.

Wendy van den Hende, pfeg chief executive, says: "It's essential young people leave school equipped with the confidence and knowledge they need to be in control of their money. Although some excellent work has been done in schools, the delivery of personal finance education on a national level is patchy.

"It needs to be a priority for every school to provide it for all pupils. If we want the next generation to be financially capable we need financial education at every stage of their school life.

"It is both exciting and gratifying to have so many MPs supporting the APPG on Financial Education for Young People and we believe their involvement will truly help raise the profile of this important issue."

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?