Financial literacy: why young people are being left behind and what must change

Thousands of young people across the UK are entering adulthood without the financial knowledge they need to manage money confidently, plan for the future, or pursue entrepreneurial ambitions.

New research from AAT, conducted with Grace Hardy, Founder and CEO of Hardy Accounting, surveyed more than 1,500 16–25-year-olds and paints a concerning picture of financial preparedness among young people today. While the appetite to learn is strong, the support systems designed to build financial capability are falling short, and the consequences are already being felt.

A system that starts too late – or not at all

Less than half of young people aged 16–25 report receiving any financial education at school. Where it does exist, it often begins too late and fails to equip students with the practical skills they need for adult life.

This lack of early, consistent education shows up in real-world outcomes. Engagement with basic financial tools and concepts is limited:

• A quarter of 16–25-year-olds do not have a debit card
• Only half understand how interest is applied to credit card balances
• While over three quarters have some form of regular savings habit, almost half are not saving for later life.

These gaps matter. Without foundational financial understanding, everyday decisions around borrowing, spending, saving and investing become far harder, and more costly.

Financial difficulty is already widespread

The research also reveals that three in five young people have experienced at least one financial difficulty, including overspending, running out of money, borrowing from family or friends, or confusion over financial products.

These challenges are not evenly distributed. Financial literacy is significantly lower among young people from lower socioeconomic backgrounds and among young women, with both groups less likely to understand key financial concepts or be saving for the future. Left unaddressed, these gaps risk reinforcing existing inequalities and limiting social mobility.

A generation eager to learn – but vulnerable to misinformation

Despite these challenges, young people’s desire to improve their financial knowledge is undeniable. 83% want to know more about finance and money, and one in four are interested in learning how to start their own business.

Where young people have received financial education at school, confidence in managing personal finances is higher. Being able to talk openly about money at home also makes a positive difference.

However, many young people are filling the education gap themselves – often by turning to social media. More than a quarter (28%) scroll platforms like TikTok and Instagram for financial advice. This demonstrates motivation and curiosity, but it also exposes young people to misinformation, unverified advice and potentially harmful guidance at a critical stage of their financial lives.

What needs to change

In response to the findings, AAT and Hardy are calling for urgent, coordinated action to ensure young people are financially fit and real-world ready:

• Deliver high-quality financial education from age 5 to 19

Financial education must be consistent, practical and properly supported, with trained teachers, engaging materials and targeted help for 16–19-year-olds who have missed out earlier in their schooling.

• Meet young people where they are, on social media

Credible, verified financial information must reach young people on the platforms they already use, with clear pathways to trusted resources such as MoneyHelper.

• Tackle socioeconomic and gender barriers head-on

Financial literacy initiatives must actively address the gaps facing young women and working-class young people, helping to reduce inequality and support social mobility.

• Align government policy with positive financial behaviours

Policies should encourage saving, investing and entrepreneurship so that financial knowledge translates into real opportunities and better outcomes.

Supporting young people beyond the classroom

As AAT CEO Sarah Beale explains: “Financial skills shouldn’t be a privilege, they should be part of everyday life for everyone. There’s a clear knowledge gap, but young people are hungry to fill it.”

AAT is committed to playing its part. Alongside accountancy qualifications, AAT offers practical business skills and bookkeeping qualifications at Levels 1, 2 and 3, helping young people build real-world financial capability. Our free Virtual Work Experience programme introduces finance careers, while Informi, our free platform, supports aspiring entrepreneurs.

This research makes one thing clear: young people want to learn about money. The challenge now is ensuring they have access to the right education, at the right time, from the right sources, so no one is left behind.

Hannah Dolan is AAT's Content Manager.