NINE-year-old Keelan Virgo turns up at the bank to pay in his weekly pocket money. He is saving for a computer game and is slowly watching his savings grow. But this is no ordinary bank that Keelan is visiting - because all the cashiers are his classmates.

Gorse Hill Community Primary School in Tolladine, Worcester, is leading the way when it comes to teaching children about personal finance. With its own bank established, the school is helping youngsters to manage their cash, in an age where it is often said children don't know the value of money.

Headteacher Vivienne Cranton said: "It's very important that they gain basic money management even at this young age and setting up, running and using their own bank is an extremely practical and fun way of doing this."

This month the Government announced plans to teach all children, from as young as five, about finance. Using its Child Trust Funds scheme it wants schools to ensure every child is educated in personal finance.

Teaching materials focusing on Child Trust Funds will form part of an £11.5 million package to improve financial education in primary and secondary schools, with lessons in interest rates and how to open bank accounts.

Child Trust Funds are long-term savings and investment accounts for all children born after September 2002, intended to encourage future generations to get into the habit of saving.

Schools Secretary 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 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."

Back at Gorse Hill, the customers are gathering at the school bank, eager to pay in their money.

"Pupils come along to pay money in to the bank," said 10-year-old Scott Godfrey, one of the school bank cashiers. "We fill in the forms and stamp their paying-in book and the money is then paid in.

"It is really good because it helps us with our maths and also teaches us about using bank accounts."

The school set up the bank earlier this year as part of Natwest's Face 2 Face With Finance programme, a national scheme set up by the bank to develop business and financial skills among the young.

A group of Year 6 pupils were trained as cashiers and, with the help of teaching assistant and bank co-ordinator Lin Portlock, they run the successful enterprise.

"Every Wednesday between 8.30am and 8.50am we open up the bank," said Mrs Portlock.

"Children bring their money and their paying-in book and the cashiers process the transaction. I then take the money to NatWest bank and pay it in there.

"It has been working really well and we have a lot of children who enjoy coming along to pay money in. It helps them to save, and learn about the value of money, and it helps the cashiers with their maths and people skills."

The children are issued with genuine paying-in books and are sent regular statements so they can keep a track of how much money they have saved. They will also be taught about interest rates.

Keelan visits the bank each Wednesday morning.

"I like coming to the school bank to pay my money in," he said. "I think it is a really good idea and helps us to learn about money."

His mother, Caroline Virgo, added: "I think it's a fantastic idea that the children are taught about personal finance and learn how to use bank accounts.It's a very useful skill for them to have and helps them to realise that money doesn't grow on trees."

The school bank is also used as a way for children to meet friends and helps them to interact with others.

Kim Whitehouse, spokesman for the NatWest, said: "Once young people go out into the world of work and start earning money, it is important that they know what to do with it.

"As a result I'm delighted that NatWest is able to help Gorse Hill primary."