2009 saw record-breaking personal insolvency statistics in the UK, with more than 134,000 people filing for bankruptcy or entering into a VAT or debt relief order.

APACS statistics found in 2008 that Britain has more credit cards than people and in 2009 the average credit limit on plastic was over £5000 per person. Our consumer-driven society has been, for quite some time, far too happy. We buy things without even having the money. We see. We want. We put plastic. The recent recession that strangled the country for 18 months made credit no longer so easy to come by. So those living on credit, paying off existing debt by taking more, suddenly found themselves unable to make the payments. Contrary to the common misconception that debt hits low-income families the hardest, it was the number of professionals in the middle-class demographic that saw the fastest growth when it came to personal insolvencies. This is largely attributed to their higher credit limits and a general tendency to spend a bit more leniently. The credit crunch meant that these people found themselves unable to borrow more money, and despite being a group we would normally consider perfectly capable of paying debt, they were unable to make payments in a number of cases. This, in turn, led thousands of people to seek a formal debt restructuring.

So how do we solve our money mismanagement problems? Well, the British government thinks it has the answer. It recently announced that children from the age of five will receive money management lessons in schools as part of the nationally mandated curriculum. Will this solve our problem? Well, it certainly can’t do any harm, right? Previously, 16- to 18-year-olds could simply leave school without a single lesson in money management and be sent to a world where credit is too accessible. How can these people be expected to manage their money when they have never had to learn about it before? Perhaps the new government incentive will lead to a much more financially savvy generation in the coming years.