A third of all 18 to 24 year olds in the UK admit they are left confused by common financial terms, according to new research from the Post Office Financial Services.
The Money Matters report reveals that, whilst the government is looking to address financial education by making it a part of the compulsory national curriculum, there is a whole generation of young people in the UK who are still in the dark when it comes to understanding financial terminology.
Meanwhile, only 13% of people aged over 55 saying they don’t have a good grasp of the terms and jargon associated with finance.
34% of people aged between 18 to 34 do not know what PAYE stands for, compared to just 6% of those aged over 45. Some 9% incorrectly guessed it meant Permanent Average Yearly Extra.
Similarly, 31% of 18 to 24 year olds don’t know the meaning of APR, compared to just 6% of those aged over 55; 13% thought it meant Annual Profit Rise rather than Annual Percentage Rate.
A third of young people (33%) are also concerned that not being ‘in the know’ makes them look foolish. 18% said they have bought a financial product recently without fully understanding it.
Better financial education is seen as vital by people of all ages, with almost three in ten (29%) wishing more information and advice was available.
The findings from Post Office Financial Services were issued as the high-street brand launches a new advertising campaign reminding the public about the breadth and depth of its financial services, from mortgages right through to savings.
Nick Kennett, director of financial services, said: “We were surprised by just how many people, especially young people, are still baffled by financial terms. The banking industry has worked hard to eliminate unnecessary jargon and acronyms but it seems there is still some way to go before people feel completely comfortable speaking the language of money. What’s worrying is how many people could be either potentially missing out on attractive deals on financial products, or simply avoiding money matters completely, for fear of looking foolish.
“At Post Office Financial Services, we’re committed to simplifying how we communicate to our customers and we aim to help bridge the gap for customers who are feeling confused about financial services and are too embarrassed to ask for help.”
