Poor financial education costs the UK government £3.4bn a year, according to the report published today by the Centre for Economics and Business Research (CEBR) for MoneySavingExpert.com.
The study finds there are four key areas where poor household knowledge of financial matters is costing the government, including personal debt, mis-selling, retirement and unemployment.
Of these, the CEBR concludes that people not saving for retirement is costing the government the most at £6.2bn in subsidies.
It estimates that financial education could also help slash the cost of retirement to the taxpayer by £1.8bn.
The report comes a year after a petition calling for a curriculum change signed by 118,000 people and backed by Martin Lewis, the founder of MoneySavingExpert.com prompted a debate on the matter in the Commons.
During the debate, schools minister Nick Gibb agreed to consider financial education during the still unpublished curriculum review, which is expected to be implemented in September 2014.
“The support for compulsory financial education in schools is a huge 97 per cent. The population, teachers’ unions and many heads agree...sometimes, I feel the only people who aren’t lined up are those sitting round the Cabinet table,” Lewis said.
“The cost of not equipping young people to become responsible consumers is huge compared to the trivial price of adding financial numeracy to the maths curriculum and money awareness to PHSE,” he added.