Younger people know less about their savings than other age groups, new research by HSBC has shown.
Based on a survey of 1,000 people, the research concluded that 5.1million savers under 25 do not know the interest rates on their savings accounts.
There are a further 3.7million under 25s who do not know the balance of their savings, according to the report, which is calling for more efforts to educate young people about the importance of personal finance.
However, people under 35 were more likely to have a goal for their savings.
Head of HSBC in the community, Peter Bull, said: “HSBC believes that it is never too early for young people to begin to learn the basics of managing money and the importance of budgeting and saving.
“That is why we are supporting What Money Means in partnership with pfeg (the Personal Finance Education Group) which is a financial education programme aimed at increasing the quality and quantity of personal finance education in primary schools.”
While the survey showed greater numbers of saver apathy amongst younger savers, there is a general disinterest amongst age groups. Analysis of the survey results showed 84 per cent of 35-44 year olds didn’t know their savings interest rate, compared to 89 per cent of under 25s.
A high percentage of people have no savings goal across all age groups. But a greater number of people under 35 have a goal for their savings, while those over 35 are less likely to have a set goal.
Radical savings ideas
On 18 July 2011, the Social Market Foundation published a report calling for radical ideas to encourage saving.
Following analysis of data on wealth and assets, and Child Trust Funds, the think-tank said most savings policy measures had only really had an impact on people already inclined to save.
The report’s co-author, Jeff Masters said: “With more than one fifth of households having more debts than savings and people in the UK saving substantially less on average than their European counterparts, the scale of the savings challenge is huge.”
The report proposed the creation of a ‘no lose lottery’ where a £1 ticket would automatically add 50p to savings while offering the chance to win from a prize fund, with a live draw similar to the National Lottery.
It also proposed a savings smartcard that would allow people to put small amounts into savings at various locations, such as supermarket checkouts, and for tax relief on pensions to be scrapped.
The report said, rather than offering tax relief on pensions, the government should contribute a fixed additional amount into savings for every £1 added to a pension fund.
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