The research revealed that:
· Over half of England’s teenagers have been or are in debt by the time they are 17
· 90% worry about their money and spending but tend to think of overdrafts and credit cards as easy ways to spend more
than they earn or buy things they could not normally afford
· One in five teenagers agreed that credit cards would enable them to buy things they could not normally afford
· One fifth of all respondents thought that a pension was a type of bank account
Gavin Shreeve, chief executive of the ifs School of Finance, said;
"Financial capability in the UK is generally woeful and the research PFEG have undertaken again confirms this is particularly true of young people.
The survey suggests over 50% of teenagers are in debt by the age of 17. Although I don’t have concrete figures, I’d be prepared to bet that there are no 17 year olds in debt who have taken a dedicated qualification in personal finance.
The fact one in five teenagers said that credit cards would enable them to buy things they could not normally afford again suggests a real lack of understanding about how credit cards work. In contrast, research by the University of Manchester suggests that those who study a standalone course in financial education not only understand credit cards, they reduce the number of cards they have and switch to cards with a lower interest rate.
Also, whilst the PFEG research shows one fifth of all respondents thought that a pension was a type of bank account, there is evidence that those taking a standalone qualification in personal finance not only understand what a pension is – they have actively begun making arrangements to get one – aged 18!”
Gavin Shreeve went on to state, “In short, the survey PFEG have commissioned is another useful demonstration of the problem. Attention now needs to be given to the solution. Sprinkling personal finance across non-core areas of the curriculum as the Government intend will do very little to improve financial capability. The fact none of the this will be examinable means there is no evaluation as to whether any learning has actually taken place.
Evidence suggests that offering students a standalone qualification in personal finance would be the most successful means of achieving higher levels of financial capability and we hope that this will be acknowledged by policymakers."
Wendy van den Hende, chief executive of PFEG concluded, “We owe it to our young people to ensure that they have the financial acumen to deal with the responsibilities of being an adult. That is why personal finance education is absolutely vital in schools.”
