The Business Lounge looks at various attempts being made to improve the financial literacy of the UK’s children, and at some of the more light-hearted consequences of the credit crunch.

Financial literacy

A recent report from Royal Bank of Scotland/Natwest claims that 1 in 4 UK school leavers think that an ISA is something to do with an MP3 player or an energy drink. The Business Lounge thinks there is no shame in this, after all, the technology/gadget industry seems to have claimed the letter “i” for itself.

Also, an ISA (individual savings account), in its simplest form a specific cash savings account, allows the saver to earn interest which is exempt from income tax. Therefore, it is hardly surprising that school-leavers don’t know about these being fairly irrelevant to them so far in their lives. Even with some pretty good holiday jobs, most will never have earned more than the personal allowance in one year, and so will not have had to worry about paying income tax at all.

The issue of financial literacy, and in particular addressing this in schools, seems to be the hot topic - are we accepting that we are doomed with negative equity, lack of pension provision, and extensive credit card debt but are trying to find a glimmer of hope for our children?

Money-man Alvin Hall addresses the problem with a new book aimed at children “Show Me the Money” which covers finance, business and economics. There is also a scheme which aims to allocate volunteer chartered accountants to schools to support teachers in teaching personal finance to pupils.

Meanwhile, money-saving expert Martin Lewis hasn’t given up on us adults. Through his website he’s set up a charity to provide grants for individuals and groups to educate on consumer and debt issues.

As an aside, perhaps the UK isn’t as developed as we thought, at least in this area. Apparently, street children in Delhi are able to have their own bank accounts through The Children’s Development Bank. However, perhaps this isn’t such a positive sign but indicative that they are having to grow up quickly, running businesses to support their families.

Winners in the credit crunch?

The phrase “credit crunch” seems to be used interchangeably with “slow-down”, “uncertain economy” or even “recession” etc, rather than merely referring to the impacts of sub-prime investment in the US, and the subsequent effects on the banks and mortgage availability over here. Anyway, many articles have looked at winners and losers of a “credit crunch”, which in one newspaper led to a lively debate about the impact on condom sales. On the plus side, more people are expected to entertain themselves at home, but as one commentatory put it - someone losing their job might not feel that “in the mood”.

Linked, but on a slightly more romantic note, one dating website claimed to have achieved an unexplained increase in new members in recent months, concluding that this is a less expensive way of meeting new people than the traditional night on the town. And presumably leaving ample time for people to study ISAs and the like.

As with all our information in The Business Lounge, this is not comprehensive business advice; contact your accountant to discuss how the issues raised affect you.