Almost half of teenagers trust banks more than their own parents for financial advice, according to Carrington Dean’s Teen Money Survey which found that the banking sector has retained teenagers’ trust despite being repeatedly named by British adults as the UK’s least-trusted industry.
The online survey, which canvassed the views of 1,042 teenagers aged 15 to 17, was carried out independently by Carrington Dean, a Glasgow-based financial group that includes Scotland’s largest independent debt solutions business.
90% of survey respondents were school pupils or college students, 79% have their own bank account and 17% have more than one account.
The survey found that independent financial advisers ranked third overall as most trusted source of financial advice after parents and banks. Social media trailed in fourth place, followed by teachers who ranked only marginally higher than teenagers’ own friends, who emerged as the least trusted source.
However, the survey showed that many teenagers appear to trust banks without either fully understanding their own bank statements or being clear about the role of high street banks. 44% of respondents stated that they struggle to fully understand bank statements. Also, one-third of teenagers believe that high street banks are responsible for setting UK base interest rates. Only 16% of teenagers correctly named the Bank of England as responsible for setting UK base rates.
Peter Dean, managing director of Carrington Dean said: “There is a sharp contrast between the findings of our survey of teenagers and surveys of the adult population which have repeatedly found widespread distrust of banks. The biggest difference is that teenagers not only show a high degree of trust in banks but they place little value on independent financial advice. This highlights an urgent need for better financial education so that young people understand the benefit of independent advice.
“If we don’t bridge this educational gap, we are letting teenagers down by failing to educate them on how to make informed choices about their finances.
“Today’s 16 year olds were only 10 when the UK recession began, too young to be fully aware of the banking scandals that their parents have lived through – from bankers’ bonuses to mis-selling of interest rate swaps and payment protection insurance. Their relative inexperience means they are more vulnerable to marketing campaigns – they need to learn how to compare products properly, and how to identify the ones which best match their own financial goals for life.”
Carrington Dean is developing a financial education programme for secondary school pupils, designed to help young people become confident in responsible budgeting, understanding credit and debt issues, choosing appropriate financial products, and saving and planning for the future.
Dean said: “We believe that young people should be given training on personal finance issues to help them and their families avoid financial hardship. Carrington Dean is offering to work with schools to provide practical financial lessons with an emphasis on independent advice and developing vital skills for life.”
