The Richmond Project has backed the Government’s commitment to adding financial education to the curriculum for all primary and secondary schools by 2028, and is helping to develop the core guidance.
The study asked respondents three questions to test their knowledge of compound interest (how interest accumulates on a loan or savings over time), inflation (what happens to the value of money as prices rise), and risk diversification (why spreading savings across different assets reduces risk).
Just 28 per cent answered all three questions successfully, meaning the UK lags behind Germany (53 per cent), Switzerland (50 per cent), the Netherlands (45 per cent), Australia (43 per cent), Canada (43 per cent), Finland (36 per cent) and the United States (30 per cent).
Four in 10 answered none or just one of the questions correctly, falling into the poor or very poor categories. This included 52.74 per cent of 18- to 24-year-olds, and 50.71 per cent of 25- to 34-year-olds, compared with just 25.56 per cent of 55- to 64-year-olds and 20.34 per cent of those 65 and older.
‘Less clarity’ for younger generations
The research also found that adults aged 55 and older who were educated to GCSE level are more likely to have a good or very good score (71 per cent) than 18 to 24-year-olds who held a postgraduate degree (54 per cent).
Lizzie Gaisman, the charity’s chief executive, said: “If I had to hazard a guess [about the age disparity], one of the things that’s very interesting is generations before us have learnt by doing and have really thought about these things in the context of their daily lives.
“Younger generations have access to loads more information than previous generations did, but maybe, therefore, less clarity in what the exact right thing is to do. That’s only a hypothesis.”
Mr Sunak added: “I think Lizzie summed it up brilliantly… even older people who have less formal education end up showing they have higher financial literacy than younger people with stronger formal education qualifications, which is slightly surprising.”