Financial Literacy among year-old teenagers. - based on a market research survey among teenagers years old in Denmark

Transcription

1 Financial Literacy among year-old teenagers - based on a market research survey among teenagers years old in Denmark

2 List of contents 1.Purpose of the study Page 3 2.Methodology Page 4 3.Results 1. Financial awareness and responsibility Page Aspects of pocket money and savings Page Teenagers as consumers Page 29 Page 2

3 Purpose of the study Danske Bank wants to investigate how teenagers knowledge about personal finances are and if they are interested in learning more about the subject. The following topics are covered: Income How much money do the 15 to 17 year olds have, and where do they get their money from? Consumption What do the year olds spend money on? How often do they spend money? What would they spend an unexpected amount of money on? Financial literacy How do the teenagers assess their own financial literacy? Do they lack tools and knowledge to be in control of their personal finances? Who are their role models? Do they feel ready to be in charge of their personal finances? Do they have an understanding of financial terminology? The study covers four countries within Danske Bank s geographic focus area. Page 3

4 Methodology Interview period: Data has been collected in the period from until Target group: Teenagers from the age of 15 to 17 years Countries Sample Size (Not weighted) Sample Size (Weighted) Denmark Sweden Norway Finland Data Collection Data has been collected via the Internet in YouGov s own Internet-based consumer panels in the four Nordic countries. YouGov has hosted and coordinated the data collection in all four countries. Data Weighting Data is weighted on quotas such that each of the four countries counts for one fourth of the aggregated data. Reporting This report is based on the Danish results. Page 4

5 How to read the report The survey is a repeat of the Financial Literacy survey conducted in Most of the areas covered in the 2011 survey are also covered in 2012 and some areas are new in All repeated areas will be compared with regards to development from 2011 to Please note that in 2011 only Denmark and Norway were included in the survey in 2012 Sweden and Finland were added. The comparison from 2011 to 2012 will hence only concern Denmark and Norway respectively. Any significant changes/differences in the data are based on a 95%-confidence interval. This report is based on the Danish results. Page 5

6 Results

7 Financial awareness and responsibility

8 66% would like to know more about money and personal finances. 56% are very interested in money and personal finances. Both results may stem from the fact that 49% feel that they would be able to live out their dreams if they know more about money and finances To what extent do you agree or disagree with the following Disagree (NET) Agree (NET) Don't know I think I would be better able to afford to live out my dreams if I knew more about money and personal finances 39% 41% 6% 12% 27% 35% 40% 38% 8% 11% 48% 49% 12% 10% I am very interested in money and personal finances 45% 38% 6% 9% 39% 29% 36% 41% 9% 14% 46% 56% 9% 6% I would like to know more about money and personal finances 33% 23% 6% 5% 27% 19% 49% 49% 7% 16% 56% 66% 11% 11% I do not know where to get knowledge about money and personal finances 61% 64% 17% 21% 44% 43% 25% 23% 2% 27% 6% 29% 12% 7% 100% 80% 60% 40% 20% 0% 20% 40% 60% 80% 100% Strongly disagree Disagree Agree Strongly agree The focus on money and personal finances has increased significantly since 2011 both with regards to being interested in money and personal finances as well as wanting to learn more about both things. Page 8

9 On average, the year olds give themselves a score of 6.88 with regards to how well they manage money and personal finances Yourself How well or badly do you assess that you, your friends and your parents manage money and personal finances? 2% 5% 1% 2% 4% 1% 7% 8% 11% 13% 10% 15% 18% 19% 22% 18% 13% 6% 8% 9% Mean(1-10) 4% 6,50 4% 6,88 Your friends 3% 2% 10% 13% 26% 16% 12% 1% 2% 1% 13% 5,07 2% 2% 7% 12% 21% 19% 12% 6% 2% 2% 15% 5,47 Your parents 3% 4% 1% 2% 5% 7% 1% 4% 3% 3% 8% 17% 20% 20% 25% 36% 32% 5% 5% 8,36 8,47 Very badly Very well - 10 Don't know The teenagers rate themselves, their friends and their parents higher than in 2011 the increased rating is significant with regards to how well they believe they themselves manage money and personal finances and how well they believe their friends do this. In general, the girls give slightly higher ratings than the boys do except with regards to parents (same level of rating). Page 9

10 40% of the year olds feel ready to manage their own finances. However, 43% also feel not quite ready yet and 9% state that they are not ready at all. Do you feel that you are ready to manage your own finances, e.g. in terms of travelling or studying? 33% 50% 12% 5% 40% 43% 9% 8% Yes, definitely Yes, partly No Don't know The overall share of teenagers who to some extent feel ready to manage their own finances is unchanged since However, more teenagers feel more confident about managing their own finances in 2012 the share has increased from 33% in 2011 to 40% in This is however not significant. There are no significant differences among the three age groups however there have been some significant changes in attitude among the 15 and 16 year olds from 2011 to In 2011, a significant larger share of the 16 year olds (60%) was not quite ready to manage their own finances. This share has decreased to 47% in With the decrease the 16 year olds do not differ significantly from the 15 and 17 year olds as they did in The same apply to the 15 year olds. In 2011, a significant larger share of 15 year olds did not feel ready to manage their own finances (18%). This share has decreased to 10% in In terms of not feeling ready to manage their own finances the 15 year olds do not differ significantly from the 16 and 17 year old which was the case in the 2011 survey. Page 10

11 Even though 40% of the year olds feel completely ready to manage their own finances, 75% still feel that they at least partly need help and tools to manage own finances. Do you feel that you need help and tools to help you manage your own finances? 39% 35% 11% 14% 34% 41% 12% 13% Yes, definitely Yes, partly No Don't know Even though the share of year olds who feel they only need some help has increased since 2011, the overall share of those who feel they need help and tools to manage their own finances is relatively unchanged from 2011 to There have been no significant changes from 2011 to 2012 within the age groups. Page 11

12 90% of the year-olds claim that their parents advise them about money and personal finances. 100% 90% 92% 90% Who advises you about money and personal finances? 80% 70% 60% 50% 40% 30% 20% 10% 0% 20% 14% 13% 13% 13% 10% 12% 7% 5% 5% 2% 3% 3% Parents School Friends Other family The bank Others No-one Don't know Please note that School is a new alternative in 2012 hence the significant increase since Despite a slight (not significant) decrease from 92% in 2011 to 90% in 2012 parents are still the ones teenagers receive most advice from regarding money and personal finances. Compared to 2011, a significant larger share of the teenagers do not receive advice from anyone. Furthermore, a significantly smaller proportion of the teenagers receive advice from their bank in 2012 compared to There are no significant differences between the year olds. The 15 year olds rely less on advice from the bank and other family in 2012 compared to In % of the 15 year olds received advice from banks whereas only 6% claim to have received advice from banks in The same applies to other family, where 16% of the 15 year olds received advice from other family members in 2011 and only 4% claim to do so in Both changes are significant. Page 12

13 86% of the year olds state that their parents have influence on their own handling of money and personal finances Do you think that your parents' and your friends' handling of money and personal finances has an influence on your own handling of money and personal finances? 56% 35% 4% 5% Your parents have an influence 52% 34% 10% 3% 8% 42% 45% 5% Your friends have an influence 5% 38% 51% 5% Yes, definitely Yes, partly No Don't know The overall parental influence has not changed significantly since What is important to notice is that the share of teenagers who claim that their parents do not have an influence has increased significantly from 4% in 2011 to 10% in There are no significant differences across age, however the increase from 2011 to 2012 in teenagers who claim they are not influenced by their parents is greatly influenced by a significant increase in 16 year olds who claim this. The overall influence from friends has not change significantly from 2011 to Page 13

14 66% of the year olds do not know what APR is. Furthermore, 10% answer the question incorrectly Do you know what APR (annual percentage rate) is? Yes, the loan interest including all other costs associated with the loan 24% 11% 3% 1% 61% Yes, the annual interest on a loan Yes, the bank's total charges for a loan Yes, the annual tax deduction on your debt 23% 8% 2% 66% Don't know There has been a slight increase from 2011 to 2012 in the share of year olds who do not know what APR is. However this is not significant. There are no significant changes from 2011 to 2012 across age. Page 14

15 82% of the year olds correctly claim that less money would be available if the interest rate on a loan goes up. If the interest rate on a loan goes up do you have...? 85% 4% 10% 82% 7% 11% Less money available More money available Don't know In 2012 fewer teenagers correctly claim that you have less money available if the interest rate on a loan goes up compared to However the decrease is not significant. The decrease is however greatly influenced by a significant increase in 15 year olds who think one will have more money available if the interest rate goes up in 2011 the share was 4% and in % of the 15 year olds incorrectly claim that they will have more money available. Page 15

16 Aspects of pocket money

17 On average most year olds still receive pocket money and/or have a freetime job 100% How do you get money to spend? 90% 80% 70% 60% 59% 58% 50% 40% 30% 20% 10% 0% 38% 33% I get pocket money that I have to work for 29% 30% 30% 24% I get pocket I regularly get money that I money besides do not have to pocket money work for The share of year olds who receive pocket money is relatively unchanged compared to In 2011, 59% of the year olds received pocket money. In 2012, the share is 58%. Overall, the only significant change from 2011 to 2012 is a decrease in the share of year olds who answer other. The share of year olds who have to work for their pocket money has decreased slightly since This is primarily due to a decrease in the share of year olds who have to work for their pocket money. Thus this is not significant. Although the decrease is not significant evidence suggests that more year olds use their savings or receive money besides from pocket money e.g. from their parents. Across the three age groups the only significant change since 2011 is an increase in the proportion of 16 year olds who get money to spend from their savings. In 2012, 15% of the 16 year olds used their savings compared to 5% in % 1% Free-time job Student grant 14% 10% 10% 6% Spend my savings Other 3% 3% 1% Do not get any money 0% Don't know Page 17

18 79% receive less than 134 euro How much pocket money do you get per month? Base: Receives pocket money Denmark 2011 (n=176) 80% 14% 2% 2% 1% Denmark 2012 (n=174) 79% 17% 1% 1% 2% Less than 134 euro euro euro 402 euro or more Don't know There are no significant changes from 2011 to 2012 in terms of how much pocket money teenagers receive. In 2011, the share of 15 year olds who received less than 134 euro (1,000 DKK) per month in pocket money was significantly higher than the share of both 16 and 17 year olds. The share of 15 year olds who receive less than 134 euro (1,000 DKK) per month has decreased in however not significantly. In 2012, there are no significant difference among the three age groups in regards to who receive less than 134 euro (1,000 DKK) per month in pocket money. Page 18

19 79% receive less than 1,000 DKK per month How much pocket money do you get per month? Base: Receives pocket money Denmark 2011 (n=176) 80% 14% 2% 2% 1% Denmark 2012 (n=174) 79% 17% 1% 1% 2% Less than DKK 1,000 DKK 1,000-1,999 DKK 2,000-2,999 DKK 3,000 or more Don't know There are no significant changes from 2011 to 2012 in terms of how much pocket money teenagers receive. In 2011 the share of 15 year olds who received less than 1,000 DKK per month in pocket money was significantly higher than the share of both 16 and 17 year olds. The share of 15 year olds who receive less than 1,000 DKK per month has decreased in however not significantly. In 2012 there are no significant difference among the three age groups in regards to who receive less than 1,000 DKK per month in pocket money. Page 19

20 32% earn less than 134 euro per month from their free-time job. However, the average free-time job still pays more than pocket money from the parents How much money do you earn per month from your free-time job? Base: Has a free-time job Denmark 2011 (n=176) 23% 43% 17% 13% 5% Denmark 2012 (n=174) 32% 33% 24% 11% 1% Less than 134 euro euro euro 402 euro or more Don't know The only significant change from 2011 to 2012 is a decrease in the share of year olds who do not know how much money they earn from their free-time job. In 2011, the share of 15 year olds who earned less than 1,000 DKK per month from a free-time job was significantly higher than the share of both 16 and 17 year olds. The share of 16 year olds who earn less than 1,000 per month has increased significantly from 18% in 2011 to 36% in Furthermore, the increase in year olds who earn between 2,000-2,999 DKK per month is primarily due to a significant increase in the share of 17 year olds who earn within this range. In 2012, 31% of the 17 year olds earns between 2,000-2,999 DKK per month compared to 15% in The reason for the decrease in year olds who earn 3,000 DKK or more per month is also caused by a change among the 17 year olds. In % of the 17 year olds earned 3,000 DKK or more per month. In 2012, this share has decreased significantly and represents only 7% of the 17 year olds. Page 20

21 32% earn less than 1,000 DKK per month from their free-time job. However, the average free-time job still pays more than pocket money from the parents How much money do you earn per month from your free-time job? Base: Has a free-time job Denmark 2011 (n=176) 23% 43% 17% 13% 5% Denmark 2012 (n=174) 32% 33% 24% 11% 1% Less than DKK 1,000 DKK 1,000-1,999 DKK 2,000-2,999 DKK 3,000 or more Don't know The only significant change from 2011 to 2012 is a decrease in the share of year olds who do not know how much money they earn from their free-time job. In 2011, the share of 15 year olds who earned less than 1,000 DKK per month from a free-time job was significantly higher than the share of both 16 and 17 year olds. The share of 16 year olds who earn less than 1,000 per month has increased significantly from 18% in 2011 to 36% in Furthermore, the increase in year olds who earn between 2,000-2,999 DKK per month is primarily due to a significant increase in the share of 17 year olds who earn within this range. In 2012, 31% of the 17 year olds earns between 2,000-2,999 DKK per month compared to 15% in The reason for the decrease in year olds who earn 3,000 DKK or more per month is also caused by a change among the 17 year olds. In % of the 17 year olds earned 3,000 DKK or more per month. In 2012, this share has decreased significantly and represents only 7% of the 17 year olds. Page 21

22 66% of the teenagers who have money to spend receive extra money from other sources than pocket money, student grant and free-time jobs How much extra money (not pocket money, a student grant or money from your free-time job) do you receive per month? Base: Has money to spend Denmark 2011 (n=202) 81% 7% 1% 11% Denmark 2012 (n=199) 80% 10% 1% 1% 7% Less than 134 euro euro euro 402 euro or more Don't know 66% of the year olds who have money to spend receive extra money from other sources than pocket money, student grant and free-time jobs. There are no significant changes since The only significant difference observed among the three age groups is that a significant larger share of 16 year olds receive between 2,000-2,999 DKK extra per month (4% compared to none both among 15 and 17 year olds). Page 22

23 66% of the teenagers who have money to spend receive extra money from other sources than pocket money, student grant and free-time jobs How much extra money (not pocket money, a student grant or money from your free-time job) do you receive per month? Base: Has money to spend Denmark 2011 (n=202) 81% 7% 1% 11% Denmark 2012 (n=199) 80% 10% 1% 1% 7% Less than DKK 1,000 DKK 1,000-1,999 DKK 2,000-2,999 DKK 3,000 or more Don't know 66% of the year olds who have money to spend receive extra money from other sources than pocket money, student grant and free-time jobs. There are no significant changes since The only significant difference observed among the three age groups is that a significant larger share of 16 year olds receive between 2,000-2,999 DKK extra per month (4% compared to none both among 15 and 17 year olds). Page 23

24 15-17 year-olds as consumers

25 Money spent 2012 Denmark, money spent on a monthly basis Money spent on average: Maximum amount spent: Minimum amount spent: 1,300 DKK 10,865 DKK 20 DKK The year olds spend on average 1,300 DKK every month just below The money is primarily spent on clothes (21%), food (14%), and savings (10%). Page 25

26 Money spent Denmark Money spent on a monthly basis: Money spent on average: 1,343 DKK kr kr kr kr kr The year olds spend on average 1,343 DKK every month. The money is primarily spent on clothes (22%), food (15%), and parties (10%). However, 10% of the monthly spending are put into savings. kr kr kr Other 4% Mobile phone bill 5% Events 6% Gaming 3% Gifts 4% Cigarettes 2% Sports 2% Spendings Money is spent on: Repaying a loan 1% Travel 1% Charities 0% Clothes 22% kr 500 kr 0 kr 500 Bottom quartile (1st) Median Maximum amount spent: 10,750 DKK Minimum amount spent: 50 DKK Top quartile (3rd) Top 90% Transport 7% Other shopping 9% Parties 10% Savings 10% Food 15%

27 52% never spend more money than they actually have How often do you spend more money per month than you actually have? 8% 6% 5% 20% 55% 5% 9% 6% 6% 21% 52% 6% Every month About every other month About every third month More rarely than every third month Never Don't know 52% of the year-olds never spend more money than they actually have. This is a slight decrease from However the decrease is not significant. There are no significant differences between the three age groups regarding spending more money than available. Page 27

28 52% borrow money from their friends and 73% lend money to their friends How often do you do the following? 12% 9% 4% 24% 49% 2% Borrow money from your friends 11% 8% 6% 22% 48% 6% 18% 12% 9% 26% 31% 4% Lend your friends money 20% 13% 12% 28% 23% 5% Every month About every other month About every third month More rarely than every third month Never Don't know Page 28

29 Only 31% claim to have a complete overview of their monthly income and expenses Do you have an overview of your monthly income and expenses (how much money you receive and how much money you spend every month)? 38% 46% 11% 4% 31% 52% 13% 4% Yes, completely No, not always No, never Don't know The overall share of year olds who claim to have a complete overview of their monthly income and expenses has decreased from 38% in 2011 to 31% in This decrease is, however, not significant. The increase in the number of year olds who claim they not always have an overview is primarily due to an increase in the number of 15 and 17 year olds who claim this. In 2011, the share of 16 year olds who claimed they did not always have an overview was significantly higher than among 15 and 17 year olds. The distribution among the three age groups has only changed slightly in 2012 with an increase in the share of 15 and 17 year olds. Page 29

30 The year olds primarily borrow money from their parents or other family when they have unforeseen expenses 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 56% What do you do if you have unforeseen expenses? For example, if your mobile phone bill is extra high or you get a fine 58% Get or borrow money from my parents/family 33% 31% 17% 10% Spend my savings Work more hours in my free-time job 4% When year olds have unforeseen expenses, 58% borrow money from their parents/family. Looking at the distribution of where the year olds obtain money from if they have unforeseen expenses, the only significant change since 2011 is a decrease in the share of year olds who work more hours, borrow money from their friends. Furthermore, the share of year olds who do not know what they would do has increased significantly since There are no significant differences between the three age groups. However, there have been some changes within each age group from 2011 to The share of 15 year olds who do not know what they would do has increased significantly from 9% in 2011 to 22% in The share of 15 and 16 year olds who work more hours has also decreased significantly. In 2011, the share of 15 year olds who worked more to pay for unforeseen expenses was 12% and the share of 16 year olds was 18%. In 2012, the share is 2% and 8% respectively. The 16 year olds seem to have changed the most since 2011 in regards to funding unforeseen expenses. Apart from not borrowing money from friends, the 16 year olds also work fewer hours in 2012 compared to 2011 in order to pay for unforeseen expenses. In 2011, the share of 16 year olds who worked more was 18%, in 2012 the share is only 8%. Furthermore, the 16 year olds borrow money significantly more often in 2012 compared to The share of 16 year olds who borrow from their parents has increased from 47% in 2011 to 64% in % Borrow money from my friends 8% 8% 1% 2% 8% 13% Other Ignore it Don't know Page 30

31 68% would save up more each month if there was a savings scheme Would you save up more each month if there was a savings scheme whereby you paid in a fixed monthly amount, and received some money from the bank in return? 68% 11% 21% Yes No Don't know 68% would save up more each month if there was a savings scheme that enabled them to pay a fixed monthly amount. There are no significant differences between the three age groups regarding saving. Page 31

32 Almost everyone has a mobile phone or a smartphone Do you have a mobile phone/smartphone? 24% 73% 3% Yes, a mobile phone Yes, a smartphone No 73% of the teenagers have a smartphone and 24% a mobile phone. The share of 16 year olds who has a mobile phone is significantly higher than the share of both 15 and 17 year olds. 34% of the 16 year olds has a mobile phone compared to 18% of the 15 year olds and 19% of the 17 year olds. Page 32

33 81% would prefer to transfer money through their online bank Which would you prefer, if you had to transfer money to someone else? Base: Has a mobile phone Denmark 2012 (n=291) 81% 7% 12% Transfer free of charge via your online bank Pay 0,25 DKK to transfer the money via your mobile phone Don't know 81% of the teenagers with a mobile phone or smartphone would prefer to transfer money through their online bank. Only 7% would prefer to pay 0,25 DKK to transfer the money via their mobile phone/smartphone. There are no significant differences between the three age groups regarding money transfer. Page 33