A survey carried out by The Student Room in association with the Department for Work and Pensions has found that if students don’t learn about money from their parents then they are unlikely to get knowledge from anywhere else.
Findings show that the majority of students (53.7%) learnt about money management from their parents but few indicated any other key sources of financial advice with 34% saying that no-one has taught them about money and they are left to learn by themselves.
The graph below shows how their different levels of knowledge affects their spending and saving decisions.
We can see that those who have received advice from their parents are more likely to have an ISA or other savings account as well as reserving their overdraft for emergencies only (58%).
Meanwhile those students who have had to learn by themselves are more likely to exceed their overdraft limit (10%) and less likely to have a credit or store card, possibly due to a lack of knowledge of what they can provide or a too weak a credit score to get one.
Pensions & Retirement
In general pensions are seen as an important factor for all respondents with between 54.2% and 57.4% rating a generous pension as one of their top 3 job benefits. However when asked about how they plan to fund their retirement those who were taught by their parents are more likely to save for their future (62.4%) compared to only 49.4% of those who have learnt about money themselves.
About the survey
The survey ran for 4 weeks in April 2011 and sought to understand the spending habits of students and whether they have pensions or other savings plans for the future and to see them through retirement.
By using the world’s largest student site, The Student Room and DWP were able to recruit over 500 students aged 13-26 from a variety of socio-economic backgrounds and at different levels of education.
The survey was incentivised with a ‘Money Makeover’ from the Money Advice Service (formerely CFEB) to help one lucky student sought out their finances and be better equipped to manage their money in the future.