Eight-year-old Louise Davis is very interested in interest, writes Hilary Wilce. "It's what you get if you leave your money in the bank for a long time," she says. "The bank then gives you a little bit of money for leaving it there." Classmate Emma Cahill, aged seven, agrees it's important to know about money, "so that when you go shopping, and you're a child, they give you the right change". And, adds Michael Luckhurst, also seven, when you're grown-up, too, "because when you're grown-up you have to go shopping a lot more, and so you need to know even more".
These Year 3 pupils at Great Chart county primary school, outside Ashford, Kent, are children of the modern world. They have bank accounts, a canny eye on where their pocket money goes, and a clear enjoyment of the practical business of pounds and pence. Soon they will be out in the complicated world of portable pension plans, variable mortgage options, and conflicting credit card schemes, where one of their most challenging tasks, as adults, will be taking financial control of their lives.
Children at Great Chart start to study money in Year 2 under a pilot scheme, now running in a handful of authorities, which aims to improve children's personal finance education.
"It simply seemed a sensible thing to do," says headteacher Isobel Duncalfe, "to help our children grow into wise consumers, confident about making good financial choices."
The scheme, run by the Personal Finance Education Group (PFEG), attempts to ensure pupils leave school with an understanding of where money comes from, where it goes, how to manage it, how to assess risk, and the wider ethical social and environmental implications of financial decisions.
Year 2 pupils at Great Chart make a money box and work with cash, adding, subtracting and making change. In Year 3 they will move on to talking about foreign money, costing out ingredients for a simple recipe, and surveying how pupils in the class use their pocket money. Later, they might work out the cost of carpeting or tiling a classroom, compare the returns on a variety of savings plans, discuss taxes and what they are for, study local jobs, and think about charitable and environmental issues in relation to money.
"The revelation," says Isobel Duncalfe, "has been how even the youngest children already have quite an advanced concept of where money comes from, and what you have to save for, and how you have to budget."
Andrew Flatt, curriculum co-ordinator, adds: "It's also an area where they can show us they are not just passive learners, that they are already aware of things to do with banks and money. They can tell us about how child support works, for intance."
In trying to weave personal finance education into the curriculum, Mr Flatt has found that much of what is needed to be taught is already covered in subjects such as maths, information and communications technology, geography and English. "Often it's just a question of adding another dimension to the discussion, or saying, 'If you've got to teach that anyway, then why not do it in this way?'" At secondary level it gets more complicated, but schools have found that discussion of issues such as world debt, share trading and public borrowing can also be slotted into lessons such as business studies and personal social and health education.
"We've had a lot of support from teachers for what we're doing," says Roshan Bailey, project manager for the PFEG. "They understand why it's necessary. But time is the key issue. Time and resources."
Because of this, the PFEG, which brings together government, financial service industries, consumer representatives and educationists, is fine-tuning a learning framework that outlines how personal finance objectives fit with national curriculum goals, as well as working to ensure that classroom resources are of high quality. It is also starting to work with curriculum planners in Scotland and Northern Ireland.
Through its website and newsletter, the PFEG hopes to spread the word on the variety of ways in which schools can help produce financially literate citizens for the future.
For further information about the NatWest's work on personal finance in schools, call the NatWest Financial Literacy Centre on 01203 524234 or the customer service helpline on 0800 505050.
The scheme can also provide work experience for pupils and placement days for teachers. Face 2 Face with Finance website: www.natwestf2f.com MidBank
HSBC bank (formerly the Midland Bank) has run a school-based personal finance scheme since the early Eighties, in which a "branch" is opened in a school and staffed by pupils. The MidBank project is intended to give pupils experience of running a bank account and managing their money. The bank also produces a free guide to personal finance, Let's Sort Money Out.
Further details from customer information, PO Box 757, Hemel Hempstead, Herts HP2 4SS, or ring a local branch.
Money Management Council
This independent, non profit-making charity, is dedicated to promoting a better understanding of money and how to use it. The council produces a range of free factsheets explaining the rudiments of personal finance.
Further information from PO Box 77, Hertford, Herts SG14 2HW.
The Personal and Financial Education Group
51 Gresham Street, London EC2V 7HQ. Roshan Bailey is project manager on: 0171 216 7550. Website: www.pfeg.org.uk