Article date: 14 August 2007
- If I had £1,000, I'd buy a Ferrari...
They may be experts on the Xbox and pros on Potter, but according to new research from Norwich Union, when it comes to personal finance, today's youngsters have a lot to learn!
A survey of 500 UK youngsters aged 7-11 found that four out of five have no idea how much they would need to pay for big ticket purchases such as houses, cars or holidays.
Most children thought the average house price was around £100,000, less than half the actual average of £214,222*. Only one in five (21%) guessed around the correct answer, while one in 10 (9%) thought a des-res would cost a mere £1,000. Two percent of children believed an average three-bedroom home would set them back more than £1 million!
Similarly, only 15% of children questioned knew the cost of a new family car and only 12% had any idea of the price of a holiday for four in Disney World, Florida.
Salaries too were cause for confusion with only one in 10 (10%) of youngsters correctly identifying the UK average wage as between £20,000 and £30,000.** Most children (24%) estimated that the average worker received £15,000 a year for their labours. Although 11% thought they would pick up an annual pay packet of less than £5,000.
Unsurprisingly, most respondents thought their parents should receive more than the national average wage, with "more than £1 million a year" being the most popular choice of one in six (16%). Even the second most popular answer set mum and dad's annual income at an optimistic £75,000.
The Norwich Union survey also offered a window into the youngsters' purchasing power. More than three quarters (78%) of interviewees said they received some form of pocket money. Most 7-11 year-olds (25%) said they receive between £2.50 and £5.00 a week, although 6% claimed to pick up a weekly "wage" of £25 or more! Only 17% admitted asking "the bank of mum and dad" when they wanted something special.
The young interviewees also provided some amusing insights when asked how they would spend £1,000. Answers included:
- A holiday home in Scotland
- Sweets and a cow
- A massive swimming pool with loads of accessories
- A nice Jacuzzi, a big trampoline and a huge garden
- A horse
- A motorbike for Dad and an Xbox for Mum
- Doctor Who toys and a Tardis play set
- I would buy a Vauxhall Corsa and make it look really nice
- A Nintendo Wii and 18 games
- Lots of shoes.
And with a £10,000 windfall, children chose:
- A McLaren F1, a Honda, a Ferrari and a Chopper with turbo boost
- I would spend it on a toy shop and take all the toys
- Food, drink, games and consoles
- The fastest car in the world!
- A large TV
- A Nintendo DS, 100 games, a mansion, a Porsche, a holiday to the Dominican Republic and a Motorola
- A jet which is bigger than the Titanic
- I would give half to poor people around the world and half to animal funds
- A Wii and an office and a bin to go with it
- More shoes...
Simon Quick, director of marketing for Norwich Union, said: "It's fascinating to see the financial world through the eyes of children and look at their attitudes towards money. Our research showed that most of the 7-11 year-olds had some level of economic knowledge through receiving pocket money and saving in a money box or bank account.
"However, while it's fun to see how youngsters would spend their money, the survey also highlights the need for more to be done to educate children about financial planning. As things stand, many look set for quite a surprise when they start paying their own way!"
Norwich Union is a supporter of pfeg (Personal Finance Education Group), an education charity whose mission is for all young people to leave school with the confidence, skills and knowledge they need in financial matters so that they can participate fully in society.
Norwich Union press office contacts:
Sarah Horner 01904 452828 Out of hours 07800 691569
Notes to editors:
Images of children's drawings showing how they would spend £1,000 are available on request.
*Source: Department of Local Government and Communities
**The Office of National Statistics: 2006 Annual Survey of Hours and Earnings states the UK average salary as £23,600.
The research was carried out in July 2007, interviewing 514 children aged 7-11 in the UK.
About Norwich Union
Norwich Union is one of the UK's biggest life insurers. It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
Norwich Union has strategic alliances with building societies and other leading UK brand names including CIS and The Royal Bank of Scotland Group. Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media