It has been a while since canny financial management was more than a proverbial distinction of the Scots.

Figures supplied by Citizens Advice Bureau (CAB) Scotland this month showed that the charity took on 15,348 debt cases in Scotland last year with a total debt of £198 million. The number of CAB debt clients north of the Border has increased by 22% in the last five years, with the total amount of debt up by 12%

Conclusive comparative data on Scotland and the rest of the UK is hard to pin down, but according to insolvency practitioners R3, at 33% each, Scotland and the West Midlands top the UK league for the proportion of individuals with no savings at all, compared to 28% nationally, and only 30% in the depressed north-east of England.

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Earlier this month R3 showed that, compared to the UK average, Scots are twice as likely to struggle financially due to repayments on payday or similar loans, with one in five saying they struggled to make it to payday as a result of repayments to this type of debt, compared to one in 10 of the UK population.

It is clear that Scots had no cultural immunity to the great consumer-credit bubble; nor were they better prepared for its bursting than the UK's other nations and regions.

After a dip in 2009-2010, household debt across Britain has risen in every quarter since the start of 2011 and is expected to jump by a further 26%, from £1.58 trillion to £2 trillion between now and the end of 2016, faster than the growth of assets and disposable income. In Scotland as elsewhere, this personal debt epidemic – with all the misery it implies – deserves far more urgent political attention than it gets.

Nor is this a problem that will vanish with end of the recession. The causes are now culturally entwined with the rise of web-enabled, electronic payment, making budgeting harder than ever, especially for the young, the poor and the vulnerable.

"The massive increase in gambling suggests that money has become abstract," says Jim Lally, national adviser on financial education at Education Scotland since 1998. "There is no physical aspect of seeing notes and coins disappearing. That is one of the biggest issues.

"You just have to watch the ad breaks in Champions League football, it's all drink adverts, betting adverts and payday loans adverts. Even things like cashless catering at school means that educators have to get in and form the right attitudes early on, by talking about financial education from early stages all the way through."

Even if Scots were never quite as "careful" (or mean) with money as tradition suggests, a more successful nation will have to get closer to the prudence of our grandparents.

The key to doing that is better financial education, though better numeracy skills would also help.

"It makes me so angry," says Sarah Oliver, Edinburgh-based author of the widely-used textbook Money – Bare Basic Facts, Personal Financial Education. Had people been more financially savvy, they would not have agreed to take on mortgages they couldn't cope with.

"In the recent crisis customers were as culpable as the banks in the lead-up to the crash. With less ignorance, we wouldn't be in the position we are in."

Oliver, whose book is used in schools by Scotland's leading financial education charity The Stewart Ivory Foundation (see panel) said she was inspired to write the book "for young people who were going through the education system and being spat out the other end not fit for world around them".

She says: "This struck me as really unfair. It is essential to give young people the tools they need to cope with life."

Life these days means resisting the blandishments not just of the new sales-driven culture of the banks, who routinely send 17-year-olds credit card applications, and who wheedle about new 0% deals "with Christmas coming up".

There is also an increasingly aggressive sub-culture of pay-day loans firms, pawnbrokers, and high-interest "weekly payment retailers". The need to inoculate school-leavers with basic financial sense has never been stronger.

The Scottish Government, which sensibly emphasises spending on preventing problems rather than cleaning up after them, is well aware of the need to inject more "financial capability" into Scottish society.

Jim Lally cites examples of how the curriculum has long been supplemented by input from the private sector with schemes such as RBS's Moneysense for Schools programme, said to be the largest personal finance course in the UK, and Clydesdale Bank's Talk Money, Talk, as well as work by the Prudential and the Chartered Institute of Bankers in Scotland.

There is much discussion among "stakeholders" in the Scottish Financial Education Forum, though for all the talk of aligning financial education with the Curriculum for Excellence, which is committed to promoting financial "understanding, competence and responsibility", there seems little solid data confirming how much all this education-speak and conference attendance translates into classroom hours, and for how many Scottish pupils.

The most practical interventions (with the great advantage of being made by non-commercial outsiders) have been made by the Stewart Ivory Foundation, a working charity, whose "financial education officers"(FEOs), usually with a career in financial services or teaching behind them, have stood in front of 100,000 school pupils to date, winning glowing testimonials from Scottish schools from Orkney to Dumfriesshire (an FEO for Shetland has just been appointed).

As a proven, working model of partnership, it promises the most bang for the least buck, and some teachers believe the Scottish Government should provide the small amounts needed to leverage their practical partnership with more schools, rather than paying to send educationalists to "wave the flag" for Scotland's aspirations at international and national conferences.

Although its work is highly commended by the Student Loan Company, which has to deal with the results of financial illiteracy in Scotland's tertiary education sector, there seems to be some coolness towards to the Stewart Ivory model amongst officialdom, possibly because its direct approach to advising school leavers short-circuits the coded curricular theorising which occupies Scotland's educationalists.

Their preferred focus is on "embedding attitudes" from primary level upwards and "teacher empowerment", important processes, but ones that might take some time to impact on the current crisis, given that many teachers lack the confidence, or the desire, to impart effective lessons on debt, compound interest, and pensions.

But Scotland's dire statistics suggest that methods proven to work in the here-and-now should be prioritised over aspirations and the ticking of boxes in wider curricular agendas.

There is a strong case for saying, as Jim Lally does, that Scotland is ahead of the game when it comes to recognising the importance of financial education and building it into the curriculum, even if there is no strong evidence yet that this has made us a more "financially capable" nation than our peers.

But the official emphasis is producing concrete results. For example Kilwinning's James Watt College has just launched a credit union in conjunction with the local 1st Alliance Credit Union, "to address the lack of financial literacy among 16 to 19-year olds".

Given that many of us educated in Scotland in previous decades did not experience a single hour of classroom learning about the financial facts of life, things are looking up.

Even if personal financial prudence in Scotland has gone the way of its corporate equivalent in our banking sector, a citizenry with more of a grip on its purse strings is the most practical route towards the prosperous and fair society that everybody wants to live in.


Susan Wilson is a woman with a mission: to spread the gospel of financial common sense to the schools of Lanarkshire.

She is one of the Stewart Ivory Foundation's 20 self-employed regional "financial education officers" (FEOs), who travel around Scotland, talking frankly to sixth-year personal and social education classes about how best to conduct themselves in this age of easy credit, low savings rates and toughening pension conditions.

I watch her in action at Airdrie Academy, a well-run school whose teachers joke that Wilson's "scary" warnings on credit culture apply more to them than to the pupils.

Although not a trained pedagogue, Wilson's outlining of the loans landscape easily holds the attention of the soon-to-be school-leavers who sense the experience gained at the sharp end of society's money problems.

"Any questions?" Yes. Why wasn't this available when this writer was at school?

Another might be: Why not make this effective service available at all Scottish schools?

Wilson puts the class through a brisk work-out about the causes and courses of personal debt. The meaning of APR, what the small print of credit card offers conceals, how to spot the sharks from their literature, and why some store cards penalise users for being in credit. While stressing that they are operating perfectly legally, she anatomises the spin of the likes of Wonga, with APR rates of up to 4200% for late payers.

"Why do store cards target girls who wouldn't be seen dead in the same outfit three times? Wilson asks.

"Because they think we're naïve?" ventures one of her listeners.

The hour whizzed by looking at the most common routes to financial problems (from death and divorce to boilers breaking down), and will be supplemented the following week by budgeting. Wilson, who is paid only expenses, has been here 30 times, and also visits 17 other schools in North and South Lanarkshire.

Having worked for RBS for 34 years, partly for its financial education programme, Moneysense, she claims to be partly motivated by her disgust at the "sales-first" culture that overtook the whole industry from the 1980s onwards.

Established in 2003, the Stewart Ivory Foundation has what it calls "a realistic, practical and cost-effective approach to raising financial awareness in schools". It operates under a charitable umbrella and is funded until the end of the 2013/14 academic session.

The project, which collaborates with other providers, including Education Scotland, RBS and the Chartered Institute of Bankers' Financial Education Partnership, does not charge, unless the schools want to host more sessions than the standard provision.

During the academic session 2011/12, Stewart Ivory FEOs visited 190 schools, one university and three colleges, and spoke to about 15,000 mainly sixth-year students, in more than 600 sessions. They also attended freshers' weeks at three Scottish universities – nurseries of irresponsible spending assiduously cultivated by the credit industry – addressing up to 2000 undergraduates.

"We can only scratch the surface" says chairman Hamish Buchan, "but if we can make pupils more inquisitive and more inclined to do their homework, then we have succeeded.

What did the pupils think? Was it beneficial? "Yes, definitely" says Adam Paul, 17, Airdrie Academy's head boy, who hopes to study geography at Glasgow University in August. "I've had a bit of pressure from my parents not to spend too much and to budget properly, but this was the main piece of financial education I've had so far and it really opened my eyes to how tough money management is when you're a student."

"I've already got a part-time job at Argos, and hearing that has made me think more about how to get enough savings to get a mortgage, savings schemes and workplace pensions that are going to benefit you when you're older."

Compared to all the exposure their marketing resources make available to the predators, a few hours of pupil attention may not amount to much. Wilson's warnings will reverberate in at least some of these pupils heads for years, perhaps decades to come. And none of them can now say that they weren't warned.