More than four million young people across Britain have left education without a basic grasp of money management, according to research from Santander UK that exposes a decade of patchy financial teaching in schools.
Although financial education was added to the secondary school curriculum in 2014, only one in four young adults says they received any at school. The bank’s findings show that, despite many feeling confident about their knowledge, the practical experience gap is stark: 79 per cent have never created a budget, 76 per cent have never paid a bill, and 77 per cent have not set aside money for unexpected expenses.
Sarah Porretta, chief executive of Young Enterprise, said teenagers today face a “perfect storm” of rising costs, scarce entry-level jobs and an uncertain future. “They’re being asked to make important decisions without the financial stability or opportunities earlier generations enjoyed,” she told GB News. Ms Porretta argued the problem is not young people’s attitudes but the absence of a national framework that treats financial capability as a core life skill.
The scale of the worry is itself a measure of the problem. Santander found that 35 per cent of young adults worry about money every day, and nearly half say they want to improve their financial skills but do not know where to start. Meanwhile, almost a third now turn to social media influencers for financial advice, with TikTok the most popular platform. Only 17 per cent have received guidance from their bank. William Vereker, chair of Santander UK, warned the curriculum gap is pushing young adults towards “potentially unreliable online resources”.
Expert warnings: the invisible tax of financial ignorance
Hugh Viney, founder of independent school group Minerva Virtual Academy (MVA), described the most damaging consequence as the “invisible tax” of financial ignorance. “When a young person doesn’t understand compound interest, they don’t just miss out on wealth; they risk falling into a debt trap before they’ve even started their careers,” he told GB News. He said the failure begins long before adulthood and effectively institutionalises the wealth gap. “We’re sending 18-year-olds into the world with a high-level understanding of trigonometry but zero idea of what a 20 per cent APR credit card is and how it can derail their lives for a decade.”
The long-term consequences, Mr Viney argued, extend beyond individuals. “A financially illiterate population is less disruptive to the status quo, but in the long term it becomes a massive welfare burden,” he said. “True levelling up only happens when citizens have the agency to grow their own capital.”
Research from the Association of Accounting Technicians (AAT) reinforces the scale of the knowledge gap: a quarter of 16- to 25-year-olds do not have a debit card, and only half understand how credit card interest works. Financial illiteracy is significantly higher among young people from lower socioeconomic backgrounds and young women, compounding existing inequalities.
The cost-of-living crisis has made the situation worse. Almost half of young people say it has affected their ability to heat their homes, over a third report feeling lonelier because they have cut social spending, and 54 per cent say it has negatively affected their mental health. Rent alone consumes 47 per cent of the gross income for 16- to 24-year-olds, far above the national average. Young adults spend nearly twice as much as older generations on essentials such as housing, bills and travel.
‘One bill away from crisis’: young people speak out
Dylan Morris, 20, from Wrexham, told GB News he founded his clothing brand MountForce while studying and working part-time at JD Sports, but financial constraints constantly held him back. “There were opportunities I wanted to pursue sooner, but I simply didn’t have the finances,” he said. “You either don’t invest in your business so you can be financially OK, or you invest and have little money personally.” He said many young people never apply for grants or support because they do not know where to look. “There is help out there — but only if you know how to find it.”
For Aimee-Jane Parsons, 22, a learner at the charity Money Ready, the consequences were more immediate. She spent years trying to survive on Basic Universal Credit — which for under-25s pays a lower standard allowance — relying on food banks, walking miles because she could not afford bus fares, and budgeting “down to the last penny” to get through the week. She only learned how to budget, save and manage debt after falling into financial difficulty and receiving support. “They helped me see which unnecessary costs I could cut, how to open a savings account and how to set up direct debits,” she said.
Ms Parsons warned that the lack of financial education leaves young people vulnerable to debt traps such as Buy Now, Pay Later schemes. “We don’t understand credit — we just see that we don’t have to pay upfront,” she said. “Before you know it, you’re £300 in debt.” She described how the wider cost-of-living crisis compounds the problem: “Buses are expensive, food is expensive, rent is extortionate. It all adds up to making us want to stay inside and never go out. It’s no wonder young people are struggling.”
The research shows that despite banks investing in online resources, 45 per cent of young adults have never used them. Santander UK is launching a financial education programme in 2025 in response. Under planned curriculum reforms in England, financial education will become statutory in primary schools and reinforced in secondary schools from autumn 2028, with lessons on budgeting, saving, and distinguishing needs from wants at primary level, and deeper coverage of debt, interest and pensions at secondary level. But campaigners argue that inclusion on the curriculum alone is not enough; effective integration and execution are critical.
Financial pressure is also reshaping decisions about education. MVA said it has seen a sharp rise in parents reassessing what they can afford after the introduction of VAT on private school fees. The academy reported that 23 per cent of its new intake now comes from pupils who previously attended independent schools. “These are parents who were already making enormous financial sacrifices,” MVA said. “VAT hasn’t just nudged them — it has forced them to take a hard, honest look at whether continuing to stretch their finances is sustainable.” The academy added that families on middle incomes, not the ultra-wealthy, are most affected, and that the pressure is now spilling into the state sector, which must absorb students with specific learning needs that the system is not funded to support.
Ms Parsons said many of her peers are on Universal Credit, while those in work see most of their pay swallowed by rent, travel and food. “Even with the strictest budget, it’s incredibly difficult to live off,” she said. “You’re constantly one bill away from crisis.”
Ms Porretta of Young Enterprise said this uncertainty is reshaping young people’s long-term outlook. “Career paths are changing, work is evolving, and long-term security feels less certain,” she said. “Young people don’t necessarily have examples around them that give them confidence about the future.”
