The generally poor level of knowledge among some young people could hinder them from managing their finances well in future. While young people could be expected to gain knowledge with age, the increased pressures on young adults, such as the necessity to borrow for further education and easy access to credit, could mean that they are not equipped to make the best choices at a vulnerable time in their lives.
Some people have an unsteady grasp of financial terms and concepts. In an environment where many will benefit from saving for retirement they may be at a disadvantage if they do not understand, for example, the benefits of saving small amounts from a young age.
Although understanding of NZ Super increased with age, younger people who do not know that the state pension is not asset-tested might be deterred from saving privately.
Gaps in knowledge about mortgages might deter borrowers from paying off debt quickly and enhancing their financial position over the long term.
