A fifth of students have store cards, but don't know what APR means

With students facing up to £50,000 worth of debt, research from the Chartered Insurance Institute reveals most teens lack even a basic knowledge of personal finance

With students saddled with rising levels of debt, research from the CII has shown that many teens are left scratching their head when it comes to basic personal finance terms.

The research found 71% don't know what the term APR means while over half said they think that debt is "something everyone goes through".

Many students will soon face up to £50,000 of worth of debt but the CII found that 39% of students have not had any kind of financial teaching at school. For those who had received financial education, it found that many simple money management terms were not explored within their lessons.

In its survey of students aged 16-18, the CII found that a fifth have a store card and nearly 20% opened the account themselves. However, over 70% were unclear on what the term APR means, the measure by which store cards calculate their return of interest, which can rise to an eye watering 30%.

Most students were unclear what the term "equity" meant while a third were unsure what "credit" meant. Around a quarter were unclear what “debit” meant despite the fact that 95% hold a debit card.

CII's David Thomson commented, "It's crucial for this age group to have a good understanding of personal finance as many of them will set off for university and have to budget for themselves for the first time."