I used to switch off when the business news came on GMTV in the morning as I was getting ready for school," confesses Emily, a Year 8 pupil at Coloma Convent School in the south London suburb of Croydon. "But now when I hear them talking about interest rates going up or down, or the budget, or the cuts that are going to be made, I really listen because I feel I understand what they mean. And," she adds with a smile, "I've even been explaining it all to my parents."
Emily is among the first group at the school to undertake the new GCSE in personal finance offered by the Assessment and Qualifications Alliance (AQA), the largest of the three English exam boards. She is also one of the first pupils in the country to study for the qualification, which was only launched in September, just as we were all beginning to face up to the likely impact of the crisis in government finances.
There was initially, Emily and her classmates report, a bit of a question mark in their minds as to what personal finance actually meant, and whether it would have any relevance to them. Would it be frothy stuff about shopping, or overly involved explanations of the mechanism of interest rates? But now that the group is almost a year into the course – a compulsory one for the 300 girls in Years 8 and 9 at Coloma, taught for one lesson a week over two years – they understand why their assistant head, Andrew Corish, was so keen to slot it into the curriculum at this high-achieving, over-subscribed Catholic comprehensive.
"When I was told we would be doing it, I thought it would all be about things I didn't really need to know about right now – things for later in my life, like saving and borrowing and mortgages," admits Rachel. "Now though, I can see that it applies to all of us right now. For instance we've just been learning about recessions, and why Britain has got into one – which affects everyone."
Others say it has changed their own – admittedly modest – spending habits with their pocket money or allowances. "Now I understand why we have to save," says Naomi, "especially if in the future I plan to go to university. It will cost a lot of money, and you can't just rely on your parents."
Her classmate Niamh likewise has an eye to the future: "It's much better that we learn how to handle our personal finances now, before we have money. That way we might be able to avoid getting into debt." It is a sentiment to please mums and dads of secondary school age children everywhere, with university tuition fees likely to be rising, but the AQA hopes this new short-course GCSE will have a more immediate impact. The plan is to link it in with existing qualifications in more traditional economics and business studies, and so provide more encouragement for pupils who feel drawn to these longer established options at A-level.
The new syllabus covers such topics as money, work and the power of the consumer. After we have finished talking, Year 8 head off for a session on family budgeting with Celia Huggett, head of business studies at Coloma. Each is given eight credits – or tokens – and then challenged to make a series of lifestyle choices detailed and pictured on photocopied sheets.
They are asked to pick a property from among a range of houses that goes from a modest two-up, two-down, for three credits, to a footballer's pad for five. They also have to budget out of their pot for their own transport needs – one credit for buses and trains, three for a large car – and for "leisure items", from a two-credit computer to a one-credit sound system.
"And then," urges Huggett, "don't forget you have to decide how much you want to save in the bank out of your eight credits."
As the girls attempt to balance dreams with realities, she talks enthusiastically about the new GCSE option. "The girls have been very receptive," she reports. "It plays into concerns that they have about the world around them, and also into TV programmes they all seem to watch, like Dragon's Den and Junior Apprentice."
"Can we have two houses, miss?" a pupil shouts out. "Well you can, but that means you won't have much left for anything else," Huggett counsels. "All of them," she confides, "will choose the computer, but plenty too will opt for positive choices like a bike over a car." As the class then comes up to the front to bank their options, Huggett's predictions prove more or less accurate – though few have set aside any of their eight tokens as savings.
The personal finance GCSE is one of a number of initiatives launched in schools recently in response to the need, highlighted under the previous government in the "Every Child Matters" agenda, for more focus on the area of how to handle money. The hope seems to be that if the next generation can be taught the importance of financial prudence at an impressionable age, Britain's record levels of personal indebtedness may start to fall.
As the Personal Finance Education Group, a network of schools and teachers involved in teaching this new GCSE, puts it: "To make sense of the options open to them in adult life and become responsible consumers, children and young people need to learn to manage money – now."
It is closely allied with the broader Personal, Heath and Social Education (PHSE) areas of the curriculum, and to citizenship. But many of the topics included under PHSE do not lead to a GCSE. You don't, for example, emerge from sessions on sex education with a paper qualification.
Is teaching personal finance as an exam subject overdoing it?
"Well, the lessons are very different from other subjects," concedes Roisin. "There's more discussion, and we use video case- studies, but I do still think of it as a 'proper' subject. What else are GCSEs for if not to help you in your life ahead? And this definitely will help us." And should it be made compulsory – as at Coloma – or offered as one option for pupils?
Year 8 is unanimous. They're glad they're doing the course, but might not have chosen it, had it been left up to them. "What I wouldn't want, though," says Esther, "is to have to go on and do economics or business studies at GCSE as a compulsory option like maths and English. That would be too much."
Andrew Corish echoes the pupils' enthusiasm. "It is a very structured course," he says, "and most of the girls so far have reacted very well to it. They regard it as something serious and they take it seriously, so it makes sense to them that it is a GCSE."
My visit to Coloma coincides with the coverage of Chancellor George Osborne's first budget. Many 12 and 13-year-olds might be forgiven for not engaging wholeheartedly with this, but the personal finance students are keen to debate the public finances – jobs against benefits, saving against spending, and cutting now to drive down the deficit against cutting later to protect growth.
If they had to advise the Treasury, which way would they lean on that last question? Two hands go up in support of cutting now. The other eight want to take it more slowly. George Osborne clearly has some work to do in getting his message out to this unusually well-briefed group of future voters.
What's in the course
The curriculum for the GCSE in personal finance lays particular emphasis on saving and managing money. Under saving, pupils cover the why, how and where, weighing up the respective merits of banks, building societies and National Savings options.
They acquire a "basic understanding" of shares, unit trusts and the working of the stock market. They tackle some of the questions in this area that many adults continue to find bemusing.
"Candidates should be able to recommend suitable methods of saving, and other financial products for different situations, and to justify their recommendations, appreciating the risks and rewards of each method."
On managing money, the curriculum brings in not only redundancy, unemployment and long-term sickness, but also addresses some of the ethical issues that arise from investments: whether a company's environmental record, for instance, should be considered before putting money into it, or whether the employment practices of its suppliers in the developing world should be a factor.
The curriculum touches on other topics that are potentially controversial in the current economic climate. "Candidates should understand how the supply of labour is affected by a person's decision to work or not to work...[and] the reasons why the duration of unemployment might vary between individuals." There is a section, too, on the pros and cons of UK firms outsourcing their production to developing countries to cut costs.Reuse content