Financial education charity the ifs School of Finance has called on the Government to drop any reference to personal finance from the maths curriculum.

They have also urged the Government to cease referring to the new functional maths GCSE (to be introduced in September 2010) as enabling students to master the basics in personal finance as it will do no such thing.
 
The call comes as an increasing body of evidence suggests that combining maths and financial education is a fundamentally flawed approach to raising levels of financial capability.
 
In July, the Financial Services Authority (FSA) published research conducted by the London School of Economics which concluded, "we should have some concerns about delivering financial skills through the maths curriculum.”
 
This follows earlier criticism from the Government’s own schools inspectorate.

An Ofsted report published in March stated that teaching personal finance through maths lessons was harmful for both financial education and for mathematics.

The Ofsted study found that,
 
"There were shortcomings in developing personal finance education through mathematics lessons. The focus was mainly on using personal finance education as a context for applying mathematical skills, rather than on developing students’ financial skills and understanding. The numerical skills of addition, subtraction, multiplication, division and calculating percentages are often practised and applied in a financial context."

"Financial capability, however, is about more than numerical competence. It is also about developing an understanding of financial services and key ideas, the skills to apply this understanding to managing money, and acquiring particular attitudes towards personal finance."
 
The ifs has found numerous other examples of the inappropriateness of using maths to improve levels of financial capability. For example, the National Institute of Adult Continuing Education (NIACE) reported that the inclusion of maths (including fractions, subtraction and percentages, and converting money) in their Newcastle based 'Pots of Gold' finance workshops was "...not well received."
 
Even Schools Minister Jim Knight MP has previously admitted that the personal finance elements of their new functional maths GCSE, "will not address behaviour, which should be addressed in another context."
 
Speaking on the general relationship between maths and financial education, Rod McKee Head of Financial Capability at the ifs School of Finance, said:
 
“Financial capability is first and foremost about behaviour, not numeracy. Numeracy is simply an aspect. Financial capability is about how to manage personal finances. This involves understanding how to prioritise, knowing what products do and comparing them, making choices and being able to undertake key financial decisions that affect everybody’s daily lives.
 
People learn in context but the incorporation of little pieces of personal finance in maths is being used to get across maths concepts, not financial capability.  The learning simply doesn’t transfer.”
 
Talking specifically about Government plans for a new 'Functional Maths' GCSE, McKee added,
 
"The new functional maths GCSE understandably concentrates on mathematical concepts such as arithmetic and basic geometry. What is being masqueraded as financial capability is confined to a couple of hours of recognising notes and coins and simple calculations using money – clearly insufficient to make any noticeable impact."

Alarmingly the Government has stated that from 2010 everyone obtaining a grade C in this new functional maths GCSE will have mastered the basics in personal finance"
 
The ifs School of Finance contend that Government should add a standalone qualification in personal finance to the school curriculum.