Financial education will be compulsory in all schools as part of the new national curriculum to come into effect from September 2014.
Education secretary Michael Gove launched a review into the national curriculum in January 2011 and has published its conclusions today.
Financial education will be undertaken as part of broader citizenship studies to help students play their “full part in society”.
The subject content for key stage 3, the basic level of education, will include the uses of money, the importance of personal budgeting, money management and a range of financial products and services.
Children who are able to take the more advanced key stage 4 will learn about wages, taxes, credit, debt, financial risk and range of more sophisticated financial products and services.
The paper states: [Students will be] re-equipped with the financial skills to enable them to manage their money on a day-to-day basis as well as to plan for future financial needs.”
The Association of Investment Companies says the decision is “potentially life-changing” for young people.
AIC communications director Annabel Brodie-Smith says: “If the next generation can leave school equipped with the knowledge and skills to help manage their finances effectively, it will make an enormous difference to their lives.
“The inclusion of financial education on the curriculum is an important step on the way to achieving this, but clearly there’s still a lot of work to be done.”