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Child trust funds are to be used as a tool to teach maths in schools as part of a £11.5 Million boost for 'financial literacy'.

Children will be taught how to open a bank account, understand basic financial concepts like interest rates and learn important skills to plan for their financial future as part of an £11.5 million boost to personal finance education, announced by Children, Schools and Families Secretary Ed Balls and Treasury Minister Kitty Ussher.

The money will be used in both primary and secondary schools to teach children financial skills that will help them to manage their personal finances. The first children that benefited from Child Trust Funds (CTF) will be starting school this September and teachers have been asked to use CTFs as a way of talking about financial education in maths lessons. A range of financial materials will be based upon the CTF, allowing teachers to bring finance to life via the children's CTFs.

Speaking from Woodberry Down Community Primary School in London Ed Balls said: "It's never too early to encourage children to think about money and saving for the future and we want to ensure that every child, no matter what their background, has the financial skills to achieve whatever they want in life.

"The Child Trust Fund provides children with a financial head start and through the extra funds announced today we plan to use it to make personal finance real and tangible in the classroom. By the time the first children with a Child Trust Fund leave school they will have the skills and confidence to manage their money well. It is vital children understand how maths is relevant to everyday issues like opening a bank account, shopping and saving."

Treasury Minister Kitty Ussher said: "Financial understanding is a key life skill. Children need to understand the value of money and how to interact with financial service providers to provide for their own futures. The skills they will learn in class, combined with the experience of having their own savings product, will better equip them to avoid financial problems in later life."

The new secondary curriculum, announced earlier this year, has a specific Economic wellbeing and financial capability strand allowing pupils to learn about the role of taxation, personal budgeting and savings, and a range of financial products including pensions, interest rates, trade and investment.

The funding will be made available from 2008 - 2011 and will be used to:

Revise curriculum guidance on financial capability

Produce a range of innovative curriculum resources which will use the Child Trust Fund as a tool to help children learn more about the value of money and savings

Ensure teachers receive high quality training and support so that they have the skills and confidence to teach financial education well

Expand the National PSHE CPD programme to include economic wellbeing and financial capability

The announcement reaffirms the Government's commitment to ensuring that every child has a financial head start in life and has the skills and confidence they need to manage their finances well. Further details will be published in the financial capability action plan early next year.

The Treasury launched the CTF as a long-term savings and investment account for all children born on or after 1 September 2002. The CTF was launched to strengthen the saving habit of future generations, promote financial education and ensure that at age 18 every child has access to a financial asset. The Government will give every eligible child at least £250 to start the fund with a further payment of £250 when a child turns 7.

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