Posted on 10-2-2004

Wealthy teenagers 'can't manage money'

Sandra Haurant

British teenagers are better off today than ever before, but lack basic understanding of personal finance, according to a report published today.
According to the Royal Bank of Scotland group, teenagers are collectively worth £2.1bn. They receive a total of £258m in pocket money each year and £713m from full- or part-time work, and they have £295m in savings and £818m in expensive personal belongings.

Some 88% of 16-year-olds own a television, 86% have their own stereo, and 84% have a mobile phone.

However, when asked to sit a personal finance test, the average teenager scored just four out of 10. Only a quarter knew what a direct debit was, while 41% could not explain what a debit card was.

Half of teenagers admitted they were not very good at managing money and only had a limited knowledge of finance. More than half do not keep track of what they are spending and almost as many wouldn't feel confident about writing a cheque.

Meanwhile, time and money constraints in schools mean that financial education is not getting through to teenagers. Personal finance education was added to the national curriculum as part of citizenship lessons four years ago, yet one third of teachers said their schools were currently unable to offer financial capability teaching.

Three quarters of teachers said they were concerned about students' lack of financial skills, but nine out of ten said they didn't have the resources, skills, support or information necessary to give money management lessons.

"Teachers recognise the importance of these skills, but they often find it difficult to give finance lessons," said London-based teacher Christine Dobson. "Not only is their own personal finance knowledge sometimes not up to scratch, but they are also hampered by timetable pressures and a shortage of relevant materials."

Benny Higgins, retail chief executive of RBS, said: "Our research reveals a worrying knowledge gap among teenagers, and a critical need to teach them basic facts about finance. We must give the teenagers of today the skills they require to deal with the world of tomorrow."