Digital wealth manager Moneyfarm quizzed the nation’s teens on their knowledge of money. It found that one in 10 thought Rachel Reeves was a TV presenter, with a further 6% adamant she was a Hollywood actor. One in 20 (5%) were convinced she was a pop star or social media influencer.
The study found that more than half (58%) of British teenagers admit they have no idea about financial budgeting, while 43% are in the dark over how to save their cash.
The teenagers also believed that their starting salary after university would be as much as £236,000.
When asked what a pension was, 9% thought it was money the Government takes from your pay each month and 8% thought it was their trust fund, which their parents will leave to them.
Six in 10 (61%) didn’t know the difference between a debit card and a credit card, according to the poll.
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Teens were pretty close on the average cost of a house, estimating an average of £350,000 versus the actual of £267,000. But they were in the wrong ballpark when it came to a tank of petrol, which they estimated at £400.
The teens were also probed on their knowledge of financial terms. One in six (13%) think an ISA is the money you earn on your savings rather than a tax-free savings account.
One in five (20%) had no idea what the term ‘inheritance’ meant, while 28% were unaware what National Insurance was.
A third (35%) of those questioned admitted that any money they receive is spent immediately, with boys spending the majority of their money on gaming (71%) and girls on clothing (74%).
The other most popular items teens splash their cash on are going out (49%), takeaways (34%), skin care (34%), cosmetics (32%) and music (24%).
Chris Rudden, head of investment consultants at Moneyfarm, said: “Financial literacy is a crucial life skill [that] 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.”
