Klarna has released a survey revealing a significant challenge in financial literacy among young adults in the UK.
The survey, involving 2,000 participants, highlights that 64% of Gen Z respondents find it easier to pick up basic words in a foreign language than to understand financial terms such as APR, capital gains, and compound interest. This issue is not confined to the younger generation alone; 57% of millennials also find financial jargon more challenging than learning a new language.
The survey identified the top ten confusing financial terms, which include Asset Management Company (AMC), Independent Financial Adviser (IFA), and others like Adverse Credit and Nominal Interest Rate.
In response to these findings, Klarna has been actively avoiding these jargons in their communications and is set to launch a redesigned app that includes an AI-powered shopping assistant fluent in over 35 languages to help demystify these terms.
Additionally, the study indicated that 31% of participants believe that financial literacy should be prioritised over foreign language learning in schools. A spokesperson for Klarna emphasized the importance of this shift, especially with the upcoming UK General Election. They highlighted the need for the next government to ensure that financial literacy is held in the same regard as foreign language education, to enhance financial inclusion.
Klarna is also stepping up its efforts to educate the public on financial terms through its new ‘Financial Takeaway’ series, in collaboration with rapper-chef Big Zuu and finance expert Bola Sol. This initiative is designed to simplify complex financial terms and is available on Klarna UK’s YouTube channel.
Klarna said, “Whoever wins the UK General Election needs to respond to these findings. Whilst foreign languages of course open up opportunities and cultural experiences, financial inclusion is just as important. That’s why we’re calling for the next Government to ensure parity of esteem between financial literacy and the teaching of foreign languages.”
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