7 Sep 2009

Teen survey reveals lack of financial knowledge

3:11 pm on 7 September 2009

Many high school students are leaving school without an understanding of very basic financial terms and concepts, a survey has revealed.

KiwiSaver, superannuation, shares and compound interest were among the topics teenagers knew least about, according to the Young Enterprise Trust, which commissioned the research.

More than half those questioned knew the answer to only 20% of the questions, and just 10% of respondents answered corrrectly a question about credit card interest.

The Trust says youth financial illiteracy could have big implications for savings, debt levels and the economy.

Retirement Commissioner Diana Crossan believes the poor result is partly because many schools don't teach the topic. She hopes a new financial education framework about to be introduced will help.

Institute of Financial Advisors president Lyn McMorran says students leaving school without knowing the basics of managing money and investing could hurt the wider economy.