The Barclays Youth Barometer, which surveyed 1898 young people aged 14 to 25, found that 42 per cent are unable to interpret bank statements.
The poll – which was undertaken to mark My Money Week – found that 36 per cent are baffled by financial terminology, 28 per cent misunderstand interest rates and 13 per cent do not know what an overdraft is.
Tracey Bleakley, chief executive for the Personal Finance Education Group, said: “It is clear that many young people are entering adult life with dangerous gaps in their financial knowledge that could lead them into serious financial difficulty. These findings underline the need for schools to teach their pupils about personal finance, to equip them with the skills, knowledge and confidence they need to manage their money well.
Financial education campaigner Caroline Stephens, said: “I would recommend that maths lessons are ideal for showing young people the benefits of savings, particularly through statistics, which are pivotal in illustrating how savings work. It’s about getting back to the basics of needs and wants and showing young people how they can save for things, rather than just getting a loan from the bank.”
Malcolm Steel (pictured), adviser for Edinburgh-based Mearns & Co, said: “Personal finance should be on the school syllabus. Children find the subject boring, though, so it needs to be relevant to them and taught in a fun and engaging way.”