According to new research from @studentbeans, schools are failing when it comes to teaching young people about using money.
Young Brits owe on average £2k across credit cards and overdrafts, but a staggering 89% admit to not knowing how to use these responsibly
Research reveals that schools are failing when it comes to teaching young people about how to use money responsibly
A quarter of young Brits don’t know of the risks associated with using a credit card, and a third still don’t know how to choose a bank account
The average young Brit (aged 16-to-24) has already accumulated almost £2,000 (£1,909) in overdraft and credit card debt, despite 89% of those within the age group admitting to never receiving financial advice on how to use financial products responsibly.
Research conducted by the money-saving app, Student Beans, further found that more than half (52%) of young people currently using financial services do not understand how interest rates work, and a third revealed they still don’t know how to choose a bank account - according to over 3,000 young Brits surveyed.
When looking to source financial advice, 75% of 16-to-24-year-olds say they were more likely to turn to their parents for information, rather than an educational institution (sixth form, college or University). When asked if they had ever received adequate financial education from school, an alarming 79% of those surveyed admitted that their school has failed to provide them with financial advice when looking to understand how financial products work. To this day, more than a quarter of young Brits (27%) are unaware of the financial risks associated with using a credit card, despite 40% of young people revealing to use one, with an average amount owed of £1,634.
Even though the web can be used as a source to obtain money advice, the internet is still a place of distrust. 80% of young Brits confess to not trusting online sources when it comes to receiving financial information.
Young Brits want to work their money smartly.
Despite a lack of financial knowledge, young Brits today have expressed a desire to know how to work their money smarter. Three-quarters of 16-to-24-year-olds say they want to learn how to invest money, and almost two-thirds (69%) want to learn how to budget.
When it comes to borrowing, almost half (45%) want to know how to borrow money more safely. However, those who do have a bank loan revealed they already owe an average of £6,300 to their bank; and many say their mounting debt is already negatively impacting their mental health. A staggering three-quarter (75%) of 16-to-24-year-olds have stressed their finances are already affecting their well-being.
Jessica Pinkett, Head of Youth Insights at Student Beans, commented:
“These findings reveal that young Brits need to be made more aware of the risks associated with using financial products. There’s a hunger for young people wanting to use their money more smartly, and there’s an opportunity for schools to be able to provide them with the information they need to do this responsibly.”
The illuminating research from Student Beans highlights the need for young people to receive sufficient education on using financial products. The data also reveals a breakdown of the average money owed from financial services used by 16-to-24-year-olds:
The average money owed from financial products used by 16-to-24-year-olds:
45% of young people have an overdraft, and on average they owe: £1,615
40% of young people have a credit card, and on average they owe: £1,634
24% of young people have a finance scheme, and on average they owe £1,753
20% of young people have a bank loan, and on average they owe £6,300
2% of young people have a mortgage, and on average they currently owe £53,000