We have run extensive research surveys to understand how well British teenagers grasp financial concepts — and the results highlight just how much work still needs to be done to support financial education.
According to the findings, more than half (58%) of teens say they don’t understand how to budget, while 43% admit they’re unsure how to save money.
The research paints a clear picture: young people are eager to build financial confidence but often lack the tools and knowledge to do so. Many have ambitious expectations – believing, for example, that a starting salary after university could be as high as £236,000. And while some of their assumptions about everyday costs, like the price of a house or a Sunday roast, may be wide of the mark, this reflects a broader gap in financial literacy that needs to be addressed.
Encouragingly, there’s a clear appetite for learning. One in three teenagers say they’re keen to understand more about managing money, and most parents (82%) say they actively try to teach their children about finances. Despite this, over a third of teens (36%) still feel unsure about handling money in the future.
Some of the confusion stems from a lack of exposure to everyday financial terms. For instance, 13% of teens think an ISA is the interest you earn on savings, while a small number even confused it with artificial intelligence or a place in Sweden. One in five are unfamiliar with the term “inheritance”, and 28% say they don’t yet know what national insurance is.
This uncertainty comes at a crucial time. At 18, many teenagers will gain access to Junior ISAs (JISAs) set up by their families, with an average pot of £23,000. When asked hypothetically how they’d use £10,000, responses varied: while some said they’d spend it on holidays (33%) or clothes (24%), others had longer-term goals in mind, such as university (24%), a house deposit (21%) or investing in stocks and shares (15%).
Spending habits also reflect the need for guidance. One in six teens (14%) don’t have any savings at all, and 35% admit they spend money as soon as they get it. For boys, gaming is the most common expense (71%), while girls tend to prioritise clothing (74%). Other popular spending areas include going out, takeaways, skincare and music.
Our Head of Investment Consultants Chris Rudden said: “Financial literacy is a crucial life skill, and it’s encouraging to see so many young people expressing a desire to learn more. It’s clear there’s work to be done to close the knowledge gap, but there’s also a real opportunity to engage teenagers in a way that empowers them to take control of their financial futures.”
“Providing access to clear, relatable information about personal finance – from budgeting to investing – is one of the best ways to ensure the next generation feels confident, prepared and capable of making informed decisions.”
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
