Recent research from the Consumer Financial Education Body revealed that one in seven borrowers do not know the kind of mortgage they have. Furthermore, research today from the FSA points out how the share of interest-only mortgages has also been increasing, with some consumers not having a plan in place for how to repay the capital.
Rod McKee, head of financial capability at the ifs School of Finance, said:
"Choosing a mortgage is probably the biggest financial decision that most people make in their life. It is worrying that so many people walk into these commitments without a fuller awareness of the implications, as illustrated in these studies.
“Educating young people on areas like this at the right age is now more important than ever, particularly with increased life expectancy and changing pension arrangements.
“The proliferation of new financial products unavailable in previous generations and a fundamentally changed economic world means financial education needs a more defined place in secondary school curriculums. At the moment there is no mandatory requirement to provide personal finance education in secondary schools.”
