Child trust funds are to be used as a tool to teach pupils how to manage their money as part of a £11.5m package to boost personal finance education.
Teachers will be encouraged to use the savings scheme, introduced in 2005, in maths lessons to "bring finance to life".
The funding, announced today by the secretary for children, schools and families, Ed Balls, and Treasury minister, Kitty Ussher, will be used in both primary and secondary schools from 2008. In their maths and personal, social, health education (PSHE) classes, pupils will be taught how to open bank accounts, use cash machines, budget, and learn about pensions and interest rates.
The money will be spread over three years. The first instalment of £4.5m will be allocated next year, with £3.5m in the following two years.
Speaking at Woodberry Down community primary school in London today, Mr Balls said it was never too early to encourage children to think about money and saving for the future.
"We want to ensure that every child, no matter what their background, has the financial skills to achieve whatever they want in life," he said.
"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."
Over recent months, MPs have expressed concern over Britain's rising debt levels and the need for young people to be prepared when it comes to handling their money.
In June, an early day motion, tabled by two Liberal Democrat MPs, called on the government to introduce stand-alone GCSEs and A-levels in personal finance.
The motion received wide cross-party support and its sentiments were echoed by the ifs School of Finance, which said personal finance should become part of the national curriculum.
Child trust funds were introduced by the government in 2005 as a way of kickstarting children's savings. Parents with children born since September 1 2002 are given vouchers for at least £250 to open a savings account for their child. A further payment of at least £250 is made when the child turns seven.
