Every child should be taught about how to manage their money effectively as part of their primary and secondary school education, an official report has concluded.
The government-commission education review, carried out by Sir Alasdair Macdonald, a headmaster from an East London school, has concluded that PSHE (personal, social, health and economics) lessons should be a compulsory part of every primary and secondary pupil’s education.
The review also calls for personal finance to become a compulsory part of PSHE from September 2011, a move that the schools secretary, Ed Balls, will now consult on.
PSHE has been a compulsory part of secondary education since September 2008, but it has largely been up to individual schools to what extent personal finance is focused on within lessons.
One of the objects of PSHE 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.
However, the ifs School of Finance warns that PSHE covers a "diverse array of subjects", meaning personal finance lessons risk being diluted.
“It is welcome that the government is placing more of a focus on financial education," says Rod McKee, head of financial capability at the ifs School of Finance. "However, this provision could be improved immeasurably if, alongside compulsory PSHE, room was also made in the curriculum for standalone qualifications on personal finance, which independent studies show do make a real difference in teaching young people about how to manage their money."
From 2010, personal finance will also be taught in schools within the mathematics syllabus.
Moneywise launched its Kids and Cash campaign to get personal finance on the national curriculum last year. A petition on the Prime Minister’s website recently closed with an impressive 2,337 signatures.