Introduction

A generation hungry for financial knowledge but lacking in key money skills

Financial skills should not be a privilege but part of everyday life, regardless of someone’s background or circumstances. To build a stronger economy, a more equitable society and a workforce that is confident and capable, every young person needs access to effective financial education and information.

It’s very positive to see this issue front and centre in recent government policy developments including the Financial Inclusion Strategy and the Curriculum and Assessment Review.

Young people also see its importance. Professor Becky Francis, Chair of the Curriculum and Assessment Review, commented that financial literacy was the one topic that was consistently raised by every single focus group with young people as part of her research.

At AAT, our focus is on opening up access to finance careers for everyone; financial literacy is a key stepping stone towards that and an issue we care deeply about. We’ve therefore commissioned new research to better understand young people’s experience of financial education in school, their experience with and understanding of financial concepts and tools, what guidance they need in this important area, and where they look for it.

Our research shows that less than half of 16–25-year-olds received financial education at school. Where financial education does exist, it often starts too late and is not preparing young people well for adult life.

of 16–25-year-olds received financial education at school

Our research also shows limited engagement with financial tools and money management.

A quarter of 16-25-year-olds reported that they didn’t even have a debit card with almost half not saving for later life.

of 16-25-year-olds reported that they didn’t have a debit card.

Understanding key financial concepts such as interest rates, inflation, the use of credit cards and compound interest is also limited in this demographic. Young people report experiencing financial difficulties such as overspending and running out of money, having to borrow money from family and friends, and experiencing confusion about financial products.

And, even more concerning is that the financial literacy challenge is more acute for young people from lower socioeconomic backgrounds, as well as young women, with both groups less likely to understand financial concepts and be saving for later in life.

But it’s not all doom and gloom. 83% of young people expressed a desire to know more. And a quarter said they wanted to know more about how to start their own business.

Where financial education exists, it helps build confidence. Being able to discuss money matters at home helps too. Young people are also proactively searching for answers, often seeking that information online.

There’s a clear knowledge gap, but young people are hungry to fill it. The question is, how to address that to benefit all and make sure that no one is left behind, whatever their background or circumstances.

In publishing this research, AAT makes the following calls to action to ensure that today’s young people and those that follow have the support they need to be financially fit and real world ready: