Britain's leading children’s financial charity has expressed serious fears after the government seemly reneged on a promise to make economic education compulsory.

This week the government dropped reforms to make Personal, Social, Health & Economic Education statutory in schools after failing to win Conservative support. Compulsory financial education for young people in the UK now appears unlikely in the near future.

Teachers and students are "crying out" for more education on money management in the current economic climate according to the respected organisation. Fears are that only "forward-looking schools" that create time for such an "essential agenda".

They fear a risk of "financial inertia" setting in amongst future generations and the UK economy

In a letter to the Shadow Schools Secretary Michael Gove on the Children, Schools and Families Bill, Ed Balls the Secretary of State for Children, Schools and Families writes:

"There is now widespread agreement that statutory PSHE is essential to prepare young people for adult life. It is very disappointing that your refusal will set back our plans to ensure that all pupils receive high quality financial education from 2011."

Current climate

The u-turn comes whilst the country’s economy continues to struggle - every 3.69 minutes someone is declared bankrupt or insolvent. A spokesperson said "it is essential that young people have a better understanding in order to navigate the financial maze of products and services"

Figures show that 94% of 16 year olds believe it is important to know how to manage money; only 53% have been taught how to, 87% of people felt financial literacy should be introduced as a compulsory topic to the school curriculum an 98% of teenagers consider it valuable for the future to learn about managing their money. Within this figure, 89 per cent would like these lessons carried out at school.

The charity has expanded rapidly as the deepest recession since WWII took hold, reaching over 20,000 young people in just 3 years, working with 71 schools and youth clubs.