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Britons have abandoned their "senses when it comes to finance", a Liberal Democrat member has claimed.

Speaking in the House of Commons yesterday, Phil Willis, MP for Harrogate and Knaresborough, suggested that an increasing number of consumers are "in dire financial situations" as a result of an inability to budget or a lack of understanding about economic products and terminology.

Mr Willis also claimed that debt management problems could be prevalent among young people and that as a result the government needs to do much more to improve financial education within schools.

Unless teaching on matters such as debt management and personal loan borrowing becomes a "key skill" alongside the likes of numeracy, IT and literacy, he reported financial education will remain "a lottery for the vast majority of our young people".

Mr Willis also pointed to a Finance Society survey which revealed the majority of young people mistakenly believe an individual savings account is an accessory for an iPod.

According to financial charity Credit Action, about 300 people declare themselves insolvent or bankrupt everyday, with average daily household debt rising by more than £13.

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