A lack of early education on investing could cost UK adults £95k according to a new report commissioned by GoHenry, the money app giving 6-18-year olds a head start in life as they learn to earn, save, spend and invest. 

The Power of Early Education on Investing report, developed in collaboration with Development Economics, shows that building a nation of investors isn't a task for adulthood, it must begin in childhood. Those without early investment knowledge start investing nearly five years later than their educated peers, resulting in a potential loss of £95k. The report also reveals that if all UK adults had the opportunity to receive education on investing when they were school age, the boost to the UK economy could be £53.5bn annually.

Kids who were taught about investing have better financial outcomes as adults 

The research demonstrates the impact early education on investing can have on an individual’s lifelong financial outlook. Compared to those who didn’t, UK adults who had financial education on investing as a child or teen:

• Have nearly double the household net worth (£556,000 vs £301,000)

• Expect to retire nearly five years earlier (Age 59.6 vs 64.1)

• Invest more than twice as much on average every month (£547 vs £249)

• Save more than twice as much on average every month (£711 vs £341)

• Hold lower household debt relative to income (28% vs 40%)

• Are more than twice as likely to be running their own business

The mental and financial toll of investment illiteracy 

Those who missed out on early investment education are three times more likely to have never opened an investment account (45% vs 13%). The impact also extends to mental health: adults without early education on investing are more likely to be "always" stressed about money (18% vs 12.5%) and are significantly more unsatisfied with their life outcomes, including career progress and financial security (40% vs 27%).

Investment literacy key for investment and job growth 

The report found that better education on investing was cited as a key driver that would encourage UK adults to invest more, coming second (22%) only to a higher disposable income (27%), highlighting the importance of early education and knowledge in removing barriers to investing in the UK.

Learning about investing from a young also generates substantial wider benefits for the economy. The report shows that if all UK adults had the opportunity to receive education on investing as a child, business formation in the UK could amount to an additional 1.3 million new businesses and the creation of 820,000 new jobs. 

Louise Hill, Founder of GoHenry said: “Our report shows that the most effective way to foster a nation of investors is through early financial education. Learning to invest at a young age has a clear multiplier effect in adulthood, including improving an individual’s net worth and personal wellbeing. It’s also shown to generate significant benefits to the economy. To truly transform the UK economy and improve the financial futures of the next generation, we must ensure every child learns about investing well before they reach adulthood to bridge the financial capability gap that is costing the UK billions every year.” 

Commenting on the findings, Stephen Lucas, Economist at Development Economics said: “Receiving early education on investing clearly has a multitude of benefits later on in life. By failing to provide this education for children, we are essentially leaving billions of pounds untapped on the table. A more investment-savvy population drives business formation and job creation, providing the kind of  resilience the UK economy needs to thrive.”

This report coincides with GoHenry's Invest In Me campaign, a nationwide initiative designed to remove the fear around investing and encourage UK families to invest in their kids’ futures through a 'Blink and they’ll be big' digital AI experience. 

GoHenry's Junior Stocks and Shares ISA is built to remove barriers to investing. It offers a single, diversified fund managed by Vanguard, with contributions starting from just £1 to allow any family to begin investing in their child's future. As with any investment, the value can rise and fall over time, so it is designed for those comfortable investing for the longer term.

To read The Power of Early Education on Investing report in full, visit here.