Schools should stop teaching children about managing money as a part of mathematics lessons, an educational charity says. Combining maths and personal finance is a “fundamentally flawed” way of teaching children how to handle money, according to the ifs School of Finance.

The body, previously known as the Institute of Financial Services, claims that a GCSE in functional maths that is being introduced in schools in two years will not teach children the basics of personal finance.

Rod McKee, the school’s head of financial capability, said: “The new functional maths GCSE 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.

“Government continues to state that from 2010 everyone obtaining a grade C in this new functional maths GCSE will have mastered the basics in personal finance.”

The organisation cites a report by the London School of Economics, on behalf of the Financial Services Authority, which said that such education would not guarantee that pupils had sufficient knowledge to make financial decisions in adulthood.

Mr McKee said: “Financial capability is foremost about behaviour, not numeracy. It is about how to manage finances. This involves knowing what products do, making choices and being able to undertake financial decisions.” The organisation says that the Government should add a qualification in personal finance to the curriculum.

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