Budget 2010 blog: An education

Today’s Budget may have seemed like a long, drawn-out, predictable litany of banker-bashing and pre-election tax breaks, but hidden deep among the tedium was at least one bold announcement – that financial capability is to be taught as part of maths GCSE.

By embedding financial capability into a subject like maths, compulsory for all 16 year-olds, the Government has taken a massive step towards addressing the issue of financial illiteracy.

It is widely acknowledged that the biggest financial problem facing the country is a lack of understanding of personal finance. How can you solve the pensions crisis when most school leavers couldn't tell you what a pension is? Where is the incentive to save or take out a mortgage to buy a house when the percentages behind AMCs and interest rates mean nothing?

There have been long running campaigns to establish finance in schools. The Personal Finance Education Group (PFEG) exists solely to lobby for greater education on the subject and has had some success.

Financial capability's encroachment into the national curriculum has been steady. It became an optional component of A-level General Studies in the middle of the last decade and has been taught as part of the non-statutory framework at GCSE level for Personal, Social, Health and Economic education (PSHE) since 2008.

But today's announcement ensures that all 16-year-old school leavers will have received a basic grounding in personal finance.

On a wider scale, it indicates a hugely significant move towards teaching a life skill of actual practical use in the real world rather than filling kids' heads with ox-bow lakes and conjugated verbs.

It is a riposte to the argument that school is less about teaching children anything useful and more about finding somewhere to put them until they are old enough not to be any trouble.

So why was such a vote-winning announcement hidden in the post-budget reports and not even mentioned in the speech? Or is the practical application of personal finance so unsexy that something of practical value to the electorate is considered to be less headline-worthy than a tax on bankers' bonuses?

Jon Cudby is Head of Online Content for Incisive Media's Financial Services Division