'Please, sir, can we do rocket science instead?'
Our masters want to move personal finance up the school agenda. Will they pass the test?
Sunday 16 April 2006
Should teenagers learn to do quadratic equations or study how to avoid horrific overdraft charges?
Is calculus more important than cracking compound interest (described by Albert Einstein as one of the universe's most powerful forces) as a way of boosting your savings?
The answer to posers like these is currently being mulled over by a range of the country's best financial and educational brains, including MPs, consumer groups, the City regulator, the educational charity Pfeg and the Qualifications and Curriculum Authority (QCA), the organisation that approves exams.
But reaching a solution is proving trickier than expected. Where once there had been impetus for a personal finance GCSE - a single proposed course intended to help teenagers grow up into confident, financially sophisticated consumers - a hotchpotch of initiatives looks set to be introduced.
This means that millions of children could still leave school and join the world of work or higher education without any real knowledge of how to handle their finances.
The current plans adopt a piecemeal approach that seeks to embed personal finance education in separate areas of the National Curriculum. At present, the subject is taught only as part of either personal, health and social education (PHSE), a general course, or citizenship (a short GCSE course found in all secondary schools).
In both cases, critically, personal finance doesn't have to feature as part of the curriculum. This decision is left to individual schools, and will depend on their resources and on whether staff feel confident in teaching the subject.
Personal finance must also jostle for time against some tough competition: subjects studied as part of the same courses include sex education and the dangers of drug abuse. It's not surprising, therefore, that the less high-profile topic of money management may take second billing.
Consequently, it's still possible for pupils to pass through seven years of secondary schooling without any exposure to personal finance.
To be fair, the subject can also be taught in the shape of any of 20 or so separate qualifications ranging from BTECs to diplomas - but again, schools must actively choose to provide these courses for pupils.
The shortcomings of the current level of provision are becoming increasingly obvious. Britons now have personal debts of more than £1,100bn (including mortgages); consumer, student and graduate debts are all at record levels; bankruptcies are on the rise; there is a serious shortfall in pension savings; and confidence in financial services firms is at a low after a series of mis-selling scandals.
Better education for young people about money and how to manage it should translate into greater financial literacy when they reach adulthood - hopefully enabling them to avoid many of the problems encountered by today's twenty- somethings. To this end, fresh measures are being considered.
Driven by the Financial Services Authority (FSA), the City regulator, the grand plan for England is for personal finance to become a "unit" of what is called "functional mathematics" in all schools from 2008. (Different but not dissimilar plans are proposed for Wales and Northern Ireland.)
Functional mathematics is described by the FSA as a new part of GCSE maths, aimed at applying personal finance scenarios to the subject - for example, how annual percentage rates are calculated on credit cards.
This is the first part of the initiative. By 2010, a review by the QCA commissioned by the Department for Education and Skills, could have led to the entire GCSE maths syllabus being revised with the aim of incorporating personal finance education.
However, discussions on both these targets are at an early, consultative stage and it's not yet clear whether either plan will lead to personal finance becoming an integral part of maths GCSE.
"On the one hand, some very valuable work is being done," says Simon Ashmore of the Institute of Financial Services, an exam body that specialises in personal finance qualifications. "But we would like to see [money management] as a standalone subject on the National Curriculum, ideally as a GCSE.
"We have such poor consumer financial literacy, and personal finance education isn't being given the proper priority."
In January, the Institute of Financial Services launched its own pilot personal finance exam for secondary schools - the Level 2 Intermediate Certificate in Personal Finance - approved by the QCA as equivalent to a GCSE. It has been adopted by hundreds of schools, Mr Ashmore says, but is being taught only as an extra subject around the main curriculum.
It had been hoped that a personal finance GCSE might be sponsored by the financial services industry - either by the private sector or by consumer groups. The proposal was considered as part of the FSA's national financial capability programme - an ambitious plan to raise financial literacy across all age groups - but was ultimately rejected. The argument was that the subject was too complex to be defined as a GCSE in its own right.
Many in the industry have now swung behind the current proposals to include personal finance as part of GCSE maths.
"It's the route more likely to succeed," says Doug Taylor of the consumer group Which?. "It's really about trying to integrate with people's lifestyles."
However, a spokesman for Nationwide building society says it believes a trick has been missed.
"With a specific GCSE, [a pupil] would have something to work towards," he points out. "We've also missed a big opportunity with the introduction of the child trust fund. This could have been a considerable spur for personal finance education - imagine learning about money as a child when you've got a £250 pot."
In a recent report, Nationwide also suggested that the Government could introduce financial incentives, to be paid into child trust funds, to encourage pupils to study for a personal finance qualification.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
Shock poll shows voters believe Ukip is to the left of the Tories
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
New era of cheap oil 'will destroy green revolution'
Ukip founder Alan Sked and Nigel Farage 'begged Enoch Powell to stand as a candidate'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
iJobs Money & Business
£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...
£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...
$125 - $175 per annum: Carlton Senior Appointments: Senior Wealth Manager In...
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
Day In a Page
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens