Kids must be more money-savvy

12 September 2005
Children don't enter adulthood with enough financial know-how, a survey says.

Research by National Savings and Investments (NS&I) has found that, despite parents' best intentions, kids lack basic knowledge in the financial arena, which could affect their ability to save or buy a house in the future.

Senior savings strategist at NS&I, Dax Harkins, said: "The NS&I Summer Savings Survey reveals that although parents have good intentions, a significant proportion are failing to talk to their children about money. With the financial pressures on the younger generation greater than ever, it is vital that we help educate children on money matters."

It was found that less than half of parents talk to their children about the importance of budgeting, whilst a only a third discuss credit cards, despite rising plastic card debts.

It has been suggested that one of the reasons adult are reluctant to speak to their children about financial matters is that they don't fully understand financial practices.

The research found that one in six British adults were unaware that inflation affects everyone, while two thirds were unable to say what the current rate of inflation is.

Research by the Royal Bank of Scotland in 2004 revealed that British 16-year-olds earned £713 million last year and received £258 million in pocket money, but over half didn’t keep track of how they were spending it.

However, the research coincides with a new report that people in the 16-24 age bracket save the highest percentage of their income compared to other groups.

For information on Child Savings, click here.

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