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IFS slams ‘chaotic’ finance education

The Institute of Financial Services has launched a scathing attack on the state of financial education in schools.

It says the UK system for personal financial education in schools is chaotic and strategies are piecemeal, unstructured and ad hoc.

The remarks are in response to the FSA’s survey, entitled, Personal Finance in Schools, a benchmark study of more than 1,000 schools. The FSA found that over a third of teachers lacked the confidence to teach personal finance and the main barrier was a stretched school curriculum.

The survey shows that despite personal finance being an essential life skill, in more than 70 per cent of schools, pers- onal finance education was in the form of occasional lessons only once or twice a term.

There are plans to introduce personal finance into the curriculum from 2008, with it forming 10 per cent of a subject called functional maths.

But the IFS says this is a fundamentally flawed idea and will not improve the position as 10 per cent will mean that it will only form a maximum of 7.5 hours over the course of two years.

It says incorporating per-sonal finance into maths lessons – historically, the most common platform for teaching the subject – is flawed because it will be maths concepts rather than personal finance that is taught.

IFS head of wider learning Ann Kiem says: “The learning does not transfer. The fact that personal financial capability in the UK is in such an appalling state is clear evidence of that. Learning only takes place when it occurs in context and when it is properly structured.”

FSA chief executive John Tiner says: “If financial education does not become widespread, there are serious consequences. The experiences of their elders have already shown us that those who struggle to manage their finances will be less effective at work, their relationships will suffer and debt may spiral out of control.”

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