Hilaire Gomer looks at new government initiatives to educate schoolchildren about finance.

If every child in Britain clubbed their weekly pocket money together they would have a combined spending power of £75m a week, according to financial advice website Motley Fool. Not a bad way to reduce the UK's debt levels, if they didn't spend it - the little darlings. Now Ed Balls, Secretary of State for Children, Schools and Families, has said, “ I want teenagers to start learning early how to make the most of their money and saving once they start work. They need to understand everyday issues like opening a bank account, buying a house and saving for their retirement as early as possible, developing a sense of responsibility as citizens.”

Balls didn't say personal finance should be a compulsory part of the curriculum, but he did say that personal and social education (PSE), should be described as PSEE with the final “E” representing “economic wellbeing” - emphasising the importance of personal finance.

And talking of pocket money, the UK average weekly pocket money is presently £6.30 for Seven-12-year-olds and £9.76 for 12-16-year-olds according to the Halifax, with Londoners getting 30% more and Northerners 35% less.

Giving personal finance proper space has always been difficult in a timetable where priority has to be given to GCSE subjects, say teachers. Most schools give no more than one hour a week to PSE, according to Ofsted the education watchdog, as it is an unexamined subject.

A charity called the ifs School of Finance (sic) introduced a GCSE equivalent qualification in personal finance in September last year.

Says ifs spokesman Phil Hall, “Schools are only going to take personal finance seriously when it is compulsory with proper GCSE and A level qualifications. We all know children are interested in money, look how they compare different mobile phones prices.”

Independent schools tend to tackle life skills and money in the top forms. Bernard Trafford, head of Wolverhampton Grammar School and current chair of the Headmasters' and Headmistresses' Conference says, “We are quite laid back about personal finance for the younger ages. We do it in the sixth form and I think we do it rather well.”

Older private-school pupils are encouraged to read the financial sections of newspapers, including those stalwarts, the Financial Times and the Investors Chronicle. Many have contacts in the City who can easily organise work experience with, say, UBS or Aviva.

One private-school group, the Girls' Day School Trust, has been offering sixth formers life skills lessons, including money management. Says spokesperson Mo Bosch, “These short courses have proved very popular with our girls and there will be more of them.” Any private school not doing likewise could well benefit from new help from the Financial Services Authority.

“When I was at school practically nothing was taught on the subject of personal finance,” says Anthony Bolton, respected fund manager at Fidelity Investments. “We were not given any guidance about how to budget and handle our regular inflows and outflows of money, let alone the subject of investment. I think this should be part of the regular curriculum so that every child knows about budgeting and the basics of investing, the difference between bank deposits, government securities and shares. Explained correctly the stock market is not a complex subject. If young people understand the ins and outs of handling their cash flow and investing early on, they are much more likely to handle their own money sensibly and much less likely to come unstuck in later life.”