Today’s school leavers have higher levels of financial literacy than adults aged between 19 and 39, suggesting that financial education is English secondary schools is having a positive impact, according to a study from Noddle.
The firm tested people in England on their knowledge of personal finance with a mock GCSE financial literacy exam, and compared recent secondary school leavers with older generations.
The government made financial education a compulsory element of the national curriculum in England in 2014, meaning that the 16-year olds of the ‘Class of 2018’ have received four years of financial education, and Noddle’s findings highlighted the positive impact it has had.
Overall, 16-year olds achieved more A grades in the mock GCSE financial literacy exam compared to millennials, at 42% and 36% respectively. Furthermore, they achieved better average scores, at 5.8 marks out of 10, whereas millennials averaged 5.3 marks, while also less likely to get the lowest grades, E or below (17% vs 25%).
Out of all age groups, millennials fared the worst on the exam, whereas baby boomers performed the best, benefitting from ‘school of life’ experience.
Over a third (36%) of millennials failed the personal finance test (D or below), a quarter got an E grade or lower and 61% were unable to answer correctly what a credit score was, despite 46% of them claiming that their education taught them about credit scores.
Over half (56%) of millennials stated they find it hard to make personal finance decisions, which is the highest among all age groups.
While baby boomers were the best performers on the test, only 16% argued that their education prepared them to make the right money choices in adulthood, provoking the thought that it is not only financial education that plays an important role in financial literacy; experience is also crucial.
Noddle managing director Jacqueline Dewey commented: “It’s really encouraging to see that 16-year olds performed well in the mock GCSE exam; four years after the government introduced the mandatory requirement for financial education.
“It proves that younger generations are likely to be well equipped to make good financial decisions, which will help them later in life when it comes to managing their money and using credit – like loans and mortgages – responsibly.
“Although the study suggests that financial education is having a positive impact on younger generations’ prospects, it has highlighted an area of concern. Namely that there are many adults – primarily millennials – who have not benefitted from financial education in secondary school and, as a result, have lower levels of financial literacy.”
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