Financial literacy is a crucial life skill…
More than half (58 percent) of British teenagers admit they have NO IDEA about money matters, while 43 percent are in the dark over how to save their cash, according to a new report.
Digital wealth manager Moneyfarm, quizzed the nation’s teens on their knowledge of money, and discovered they believe, on average, that an average starting salary after university will be as much as £236k.
Almost one in ten (7 percent) imagined that the average cost of a house in the UK is as little as £30k, while when asked what a pension was, EIGHT percent thought it was their trust fund, which their parents will leave to them. A staggering 61 percent are even left baffled by the difference between a debit card and a credit card, according to the poll.
And while teens were pretty close on the average cost of a house (they estimated £350,000 versus the actual of £267,000) – they were remarkably off when it came to a Sunday lunch roast, in a pub which they guessed cost an average of £200 per person.
One in ten (10 percent) thought the Chancellor of the Exchequer, Rachel Reeves is a TV presenter; with a further six percent adamant she is a Hollywood actress. One in twenty (five percent) are convinced she is a pop star or a social media influencer.
The teens were also probed on their knowledge of financial terms. One in six (13 percent) think an ISA is the money you earn on your savings rather than a tax-free savings account. Two percent even thought an ISA was a town in Sweden.
Incredibly, one in five (20 percent) had no idea what the term “inheritance” meant, while 28 percent are unaware what “national insurance” is yet. The survey also found that one in six (14 percent) teenagers don’t have any savings, either in an account or on a pre-paid debit card, as a third (35 percent) admit that any money they do receive is spent immediately, with boys spending the majority of their money on gaming (71 percent) and girls on clothing (74 percent).
The other most popular items teens splash their cash on are going out (49 percent), takeaways (34 percent), skin care (34 percent), cosmetics (32 percent) and music (24 percent). When quizzed hypothetically on what they would do if given £10,000 at 18-years-old, 33 percent of teens said they would spend it on a holiday, and 24 percent said they would splurge it on clothes.
A further 24 percent sensibly believed they would use it to fund university, whilst 21 percent declared they would put it towards a house deposit and 15 percent would invest it in stocks and shares.
Chris Rudden, Head of Investment Consultants at digital wealth manager:
“Financial literacy is a crucial life skill which needs to be prioritised. It is important that we address these gaps in their understanding to ensure that today’s children are well-prepared for the financial realities of adulthood.
“There is time for them to learn and develop these essential skills, and it is our priority to provide them with the necessary tools and knowledge around personal finance and money management that will empower them to make informed decisions and help build a secure future.”
Despite 82 percent of parents saying they consciously try to teach their children about money and finance and one in three (32 percent) teens saying they would love to know more, 36 percent still admit they don’t feel confident about managing their money in the future.
