The (Clydesdale) bank’s latest housebuyers’ survey found that 20 per cent of Scots mistakenly thought a 1 per cent rise in interest rates meant a 1 per cent rise in their monthly mortgage payments. But a 1 per cent rise in mortgage interest rates would actually increase the monthly repayments on a £100,000, 20-year interest only mortgage by almost 29 per cent. So one in five Scottish homeowners were underestimating the effect on their monthly budget by an average of £81.It seems that we have an education problem:
Indeed, 60 per cent of UK consumers felt their school education did not adequately prepare them to deal with personal finance issues.But do we need a special financial education curriculum? When I was at school we learned about interest calculations along with fractions and other elementary arithmetical concepts. Surely all children should be taught basic numeracy whether or not they might take out a mortgage one day.
Royal Bank of Scotland, whose NatWest subsidiary has championed a financial education curriculum in English Schools would like to see the programme extended north of the Border. And one Scottish educator told Smart Money this week that she saw no reason why a basic level of financial education could not be taught in schools.