'Financial literacy amongst students is "appallingly low"', finds Institute for Youth Policy (IYP)
British university students possess ‘appallingly low’ levels of financial literacy, according to a study carried out by the Institute for Youth Policy (IYP).
The study, which surveyed over 1000 full time university students between the ages of 18-21, found that an average of just 12 percent reported they were ‘confident’ in their understanding of basic financial terms, such as ‘tax brackets’, ‘mortgages’, ‘interest rates’, ‘inflation’ and their ability to distinguish between ‘good’ and ‘bad’ debt.
Interestingly, a far greater percentage of state-educated students (64 percent) reported receiving some sort of financial education at some point during their schooling than privately-educated students did (22 percent).
‘Our findings suggest that the private sector lags significantly behind the state sector when it comes to giving pupils any sort financial education’ said a spokesman for the IYP.
‘Considering financial education has been a compulsory part of the national curriculum since September 2014, it is alarming to see such appallingly low standards of comprehension amongst young adults in 2020’.
'A failure to grasp the essentials of personal finance prior to starting work can lead to devastating consequences in both the short and the long term'
Worryingly, whilst 82 percent of those students surveyed wished they had had a better financial education, only 19 percent said they had any intention of taking classes in financial literacy at some point in the future.
‘These results show a complacency amongst most young adults toward their financial education that may well come back to haunt them’ the IYP said. ‘A failure to grasp the essentials of personal finance prior to starting work can lead to devastating consequences in both the short and the long term’.
The findings of this study come hot on the heels of one by the London Institute of Banking and Finance, which found that just 8 percent of young people said the money skills they learnt could be attributed to a formal education.
‘Clearly the education sector needs to refine the methods by which they teach financial literacy in schools, to ensure their pupils carry the lessons learnt through to adulthood’.