A financial education charity has called on the government to scrap plans to include personal finance in the maths curriculum, as evidence suggests combining two subjects is flawed.
From 2010, personal finance will be taught in schools within the maths syllabus. However, the ifs School of Finance says that this educational approach is flawed as it will not help students master the basics in personal finance.
Both Moneywise and the ifs School of Finance believe that more needs to be done to teach children about money during their formative school years.
As part of Moneywise’s Kids and Cash campaign, we are petitioning the Prime Minister to bring personal finance onto the school curriculum as an independent subject. Making lessons in personal finance compulsory will not only ensure that every child gets the opportunity to learn about managing their money – it will also improve the way finance is taught.
Although on one level it seems fair to assume that personal finance and maths are compatible subjects, experts explain that this isn’t the case. By reducing personal finance to mathematical skills, students fail to learn about the psychological reasons behind spending and borrowing. They also miss out on gaining an understanding of financial products and learning about budgeting.
Earlier this year, Ofsted, the school inspection body, warned that the “incoherent” way in which personal finance is being taught in schools is leaving pupils ill-equipped for the future. It is concerned that spreading personal finance across a “diverse” range of subjects fails to provide students with a comprehensive education.
And as recently as July, the Financial Services Authority published research conducted by the London School of Economics that concluded: “we should have some concerns about delivering financial skills through the maths curriculum.”
The ifs School of Finance says these are just two examples of how merging maths and personal finance are not an appropriate way to teach children about managing their money.
It also cites a report from the National Institute of Adult Continuing Education (NIACE), which reveals the inclusion of maths within its Newcastle-based “Pots of Gold” finance workshops was “not well received."
And the schools minister Jim Knight MP has previously admitted that including personal finance within maths GCSE “will not address the behaviour, which should be addressed in another context”.
Rod McKee, head of financial capability at the ifs School of Finance, says: “Financial capability is first and foremost about behaviour, not numeracy. The new functional maths GCSE understandably concentrates on mathematical concepts such as arithmetic and basic geometry. What is being masqueraded as financial capability is confined to a couple of hours of recognising notes and coins and simple calculations using money – clearly insufficient to make any noticeable impact.”
As well as introducing personal finance into schools through maths come 2010, this September personal, social, health and economic (PSHE) education will also include a new non-mandatory subject: economic wellbeing and financial capability.
The object of this course is to equip pupils with a basic understanding of personal finance, from the general economy to financial products and career progression. The course also aims to raise awareness of financial issues, and to ensure the next generation learns to manage their money effectively.
The National Curriculum says that economic wellbeing and financial capability improve motivation and progression among students. It says this course also enables pupils to make effective financial decisions, informed career-related choices and to “aim high” in life.
There is little doubt that teaching young people about how to effectively manage their money is a positive step forward; being financially capable gives people more choices in life and, on a practical level, can help them avoid debt and save for their futures. So, why is this subject not compulsory for all secondary school pupils?
Teresa Callaghan, a school governor and board director of the Association of Credit Professionals with responsibility for financial education, says more must be done to make personal finance a key aspect of education.
“Schools regard PSHE as the poor relation of subjects such as science and maths, and teachers lack the interest and skills to effectively teach children about financial capability,” she says. “Unless the government does more than just pay
lip-service to this issue then we will have another generation leaving school unable to handle their money.”
Schools’ negative attitude to financial capability is a big problem, according to Callaghan. In her dealings with junior and senior schools, she has found many opposed to improving financial education to pupils.
“The government says that every child matters, but money is the one thing that touches everybody in life,” she says. “Teaching financial capability as part of PSHE is just spin – schools and parents need to start calling for more action so that we address the issue of financial wellbeing in this country.”
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