Teenagers have high financial hopes
A study from NatWest has established that today’s teenagers are underestimating the amount of debt they will accumulate over the course of their university lives and are in need of financial education.
Furthermore, they believe they will have a lifestyle greatly beyond the means of most graduates and expect, on average, to be earning a salary of £31,000 and own their own property by the time they reach their mid-20s.
The study found that the youngsters were optimistic about their future with 75% expect to own their own car by the age of 21 while 30% believe they will not get into debt in the future.
The study tracks the beliefs of 8,500 young people aged between 11-19 on subjects including earnings, budgeting, debt and hopes for their future finances.
In reality, 22 to 29-year-olds earn on average £17,817 in the UK today with the average student debt of just over £12,000.
One reason for the optimism could be the lack of financial knowledge in young people. 75% of them were unable to correctly identify the cheapest loan option from a list of four.
Stephen Moir, the head of community investment for Royal Bank of Scotland Group, the parent group of NatWest, said a hopeful generation of young people is not necessarily a bad thing however, a practical and realistic approach is crucial to equipping the next generation with the skills and knowledge they need to face the financial challenges ahead of them.
In related news, the Government is pushing for personal finance lessons in schools. A spokesperson for the Department for Children, Schools and Families, said from 2008, children will be taught how to open a bank account, understand basic financial concepts like interest rates and learn important skills to plan for their financial future as part of an £11.5 million boost to personal finance education.