Building societies could help stem personal debt crisis, says new report

Britain’s building societies are well placed to help stem the nation's personal debt crisis at a grassroots level, with better financial education for young people, according to a new report by the charity, MyBnk.

The nationwide study found that while 59 per cent of societies are already helping young people learn how to bank and budget, a breakthrough could be made in developing long-term positive money habits with a central BSA vision, effective resources and youth sector collaboration.

Tens of thousands of five to 25-year- olds are benefiting from dozens of innovative building society projects using intergenerational money advice sessions, school banks and trained volunteers. However, greater efforts on content, methodology and impact measurement are needed to help young people make informed decisions on areas such as pensions and credit, says MyBnk.

Embedded in their communities and with a strong focus on benefitting their members, building societies have a mandate and a sense of social responsibility to deliver financial education, the report concludes.

The BSA has already established a working group to advance key recommendations of the study, while individual societies are continuing to develop their activity alongside experts from the youth financial education sector.

UK personal debt is at a record £1.45 trillion, 17-24-year- olds owe on average £12,215 each (more than half of which is not student debt) and despite curriculum requirements, less than half of young people receive any form of money lessons at school.

Robin Fieth, Chief Executive, BSA said: ‘ MyBnk’s research shows that the building society sector is providing some excellent financial education ranging from the delivery of workshops, online resources and running school banks. Given their links to local communities and emphasis on building long-term relationships with members, financial education is a natural fit with their businesses. There is a considerable appetite to do more. We look forward to building on the report’s recommendations to develop the sector’s financial education provision through the new working group.’