Three quarters of 18-year-olds don’t understand the rules around borrowing or what a share is, according to figures from Opinium for Hargreaves Lansdown.
What’s more, the research also revealed that two in three 18-year-olds don’t understand inflation, interest rates or pensions.
The figures from the survey of over 2,000 people also found that across the board, men claim that they understand more about money matters at all ages than women.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Teenagers are set to get an F for finance. Because while schools have done everything possible to prepare them for their GCSEs and A-Levels, there’s a reasonable chance they’re horribly unprepared for looking after their money.
“By the age of 18, the vast majority of us had massive gaps in our knowledge. Despite the fact that an awful lot of people take on student debt at this age, and even more will qualify for credit cards, three quarters of people don’t understand the rules around borrowing at the age of 18.
“Today’s 18-year-olds will also be emerging into a world where inflation and interest rates will play a key role, and yet at 18, only 37% understand interest rates and 30% have got to grips with inflation.”
She added: “Aside from everyday finances, we also tend to know very little about putting money aside for the future at 18.
“While a healthy 55% have grasped savings by this age, only 32% know what a pension is, and our investment knowledge is even more sparse – only 28% know what a share is.
“It’s not our fault that we don’t pick these things up. For this current generation, financial education has been on the curriculum for nine years, but it only kicks in during secondary school, and teachers say they don’t have the tools or the training to cover it.”
Coles concluded: “There is some brilliant financial education going on in schools, and some excellent charities supporting it, including MyBnk, Young Enterprise and Just Finance Foundation. However, there’s no denying there are gaps.”
