Many British teenagers want to take out a personal loan when they hit 18, despite evidence that they are irresponsible with budgeting.
Many teenagers wish to take out loans when they turn 18, despite having poor budgeting skills.
Insurance firm AXA came to this conclusion after asking a sample group of UK teens about their personal finances, according to a report released today. It found that 18 per cent of 15 to 17 year olds are considering taking a bank loan when they become an adult, while 44 per cent are thinking about a credit card.
While just 17 per cent of teens told AXA that they expect to be overdrawn on their accounts by this time, 70 per cent of the group failed a simple weekly budget test of keeping within a £250 spending limit over seven days. This would imply that many of the young adults will struggle to repay their loans when the time comes to take them out.
Professor Nick Chater, who has been employed by AXA as part of its Financial Task Force, commented: "These studies emphasise what a huge challenge budgeting can be when you're still relatively new to managing money and making regular financial decisions. Many teenagers are on the cusp of leaving home for university or to get a job and while some will naturally approach money with diligence, our study suggests that they simply may not be able to cope with budgeting effectively."
He added: "Some teenagers also have spendthrift financial habits because they are used to getting what they want, when they want it."
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