Pay attention . . . and get wealthy

By SALLY HAMILTON
Updated:

 

WITH debt levels soaring, it is vital that youngsters leaving school or university can calculate the total cost of personal loans. However, most school-leavers are unlikely to have heard of the annual percentage rate charged on loans, much less know how to do the sums.

The Department for Education and Skills is trying to plug this knowledge gap by devising lessons that combine personal finance with maths. The department has teamed up with the Personal Finance Education Group (PFEG) - a charity funded by financial organisations - in a scheme that applies maths to real-life personal finance decisions. Trials are about to begin in four secondary schools, in Manchester; Rochdale, Lancashire; Needham Market, Suffolk; and Milton Keynes, Buckinghamshire.

Project leader Margaret Atherton says: 'The aim is to make maths relevant to children's lives. We plan to put the teaching in the context of a travel theme.

'Maths can be used to measure distances to destinations, analyse statistical information and work out timetables. Students can also think about how they would save or borrow for a holiday and what it would cost.'

If it is a success, the charity hopes the lesson content will eventually be able to be used by teachers of other subjects. A bigger project, called Excellence and Access, in which ten% of secondary schools in England experimented with teaching personal finance over three years, was pronounced a success in a recent independent review.

But Vola Parker, business and resources manager at PFEG, says plans to extend the scheme in England and to schools in Scotland, Wales and Northern Ireland risk losing momentum through lack of funds.

Banks such as HSBC and Royal Bank of Scotland also operate schemes with schools. ProShare, which promotes share ownership, and stockbroker The Share Centre, in Aylesbury, Buckinghamshire, both run competitions testing pupils' stock market knowledge.

Vying for top place in The Share Centre's Shares4Schools contest - in which teams invest real money in real shares - is the Isle of Man's Castle Rushen High School.

Economics teacher Jason Moorhouse says: 'We had to raise £750, which was matched by The Share Centre. Because the children had to get the money themselves, they are more careful when investing it.' Their knowledge of economics and business has been enhanced by looking at individual companies whose shares are under consideration.

'They have learned about monopolies, ownership of resources and how markets work,' says Moorhouse.

When the contest ends next month, the school can keep the money invested. Among the pupils' best buys have been WH Smith, now at the centre of takeover speculation, and telecoms minnow Stream, whose shares they bought for 15p and sold at nearly 46p.

• Further information:
www.pfeg.org
www.shares4schools.com.

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