But first a little personal reminiscence. For six years I taught accountancy and finance to a wide range of students on different courses and vastly different abilities. From NVQ2 book-keeping to post grad Management Studies; from trainee accountants to those working in the hospitality sector. I’ve seen it all and what it taught me is that financial education is severely lacking in this country. And it’s not just me that thinks this.

According to the think tank the Social Market Foundation, financial literacy in the UK remains low, with roughly 39% of adults lacking confidence in managing money and only 47% passing basic financial knowledge tests. According to Santander,  only 26 per cent of young adults report having received any financial education at school, leaving approximately 4million, without a fundamental understanding of money management. 

It’s a problem that leaves people open to being scammed or taken advantage of. Even basic concepts like % APR are often misunderstood. It’s a societal problem that government should be helping to solve but I contest here, they are actually taking advantage of this lack of understanding themselves!

So, here’s your test.

Which of these three options would you undertake for the best financial return?

A)     Buy a BUS subsidised heat pump for £5500 and in return save £100 on your energy bills if you switch to a smart heat pump tariff. (all figures taken from DESNZ)

B)     Invest your £5500 in a savings account which is offering a rate of 3 per cent

C)    Borrow £5500 to buy the heat pump, save £100 from your energy bills but pay interest on your loan at 5 per cent (ignore capital repayment at this stage)

The government’s ‘Warm and Fuzzy’ campaign is advertising the benefits of Option A.  If you agree that A) or C) offer the best financial returns then please let me know, I have a bridge to sell you.