Today’s school leavers have higher levels of financial literacy than adults aged 19-39, suggesting that financial education in English secondary schools is having a positive impact.

The finding comes from free-for-life credit report and score provider Noddle.co.uk, who tested over 1,000 people in England on their personal finance skills with a mock GSCE financial literacy exam. The experiment compared recent secondary school leavers with older generations.

In 2014, the government made financial education a compulsory element of the National Curriculum in England. The 16-year olds of the ‘Class of 2018’ have therefore received four years of financial education and the results from Noddle’s study suggest that the government’s decision is having a positive effect on young people’s money skills.

Overall, 16-year olds achieved more A grades in the mock GCSE financial literacy exam than Millennials (42% vs 36%). They also achieved better average scores (5.8 marks out of 10 vs 5.3 marks out of 10) and were less likely to get the very lowest grades, E or below (17% vs 25%).

The mock paper used in the research looked to gauge people’s understanding of key financial principles, as well as test their grasp of basic maths in the context of typical money scenarios. Questions included calculating the best interest rates, analysing the impact of inflation, understanding the difference between good and bad debt and picking the right multi-buy deal in a supermarket.

Out of all the age groups, Millennials fared the worst on the exam – with 36 percent failing the personal finance test (D or below). A quarter (25%) got an E grade or lower and 61 percent couldn’t correctly answer a question on what a credit score was. This is despite 46 percent saying that their education taught them about credit scores.

Over half (56%) of Millennials say they find it hard to make decisions about their personal finances, which is the highest among all age groups. This generations’ poor performance on the test, and difficulty making financial choices, adds further weight to the government’s decision to include financial education on the National Curriculum – and potentially helps younger generations avoid these same issues.

At the other end of the table, Baby Boomers or those aged 50 – 65, performed very well on the mock GCSE financial literacy exam. On average, they scored a B grade (or 6.7 marks out of 10). They also had the highest number of people who achieved an A or above (59%).

Baby Boomers were the least likely to agree that they find it hard making financial decisions (14%). However, only 16 percent believe that their education prepared them to make the right money choices in adulthood. This suggests that it’s not just education that plays an important role in financial literacy; experience helps too.

Jacqueline Dewey, Managing Director, Noddle.co.uk said: “It’s really encouraging to see that 16-year olds performed well in the mock GCSE exam; four years after the government introduced the mandatory requirement for financial education. It proves that younger generations are likely to be well equipped to make good financial decisions, which will help them later in life when it comes to managing their money and using credit – like loans and mortgages – responsibly.”

“Although the study suggests that financial education is having a positive impact on younger generations’ prospects, it has highlighted an area of concern. Namely that there are many adults – primarily Millennials – who have not benefitted from financial education in secondary school and, as a result, have lower levels of financial literacy.”

“Furthermore, in some circumstances, these adults thought they knew more about personal finance than they did in practice. This was the case with credit scores, where many incorrectly answered the exam question – despite saying they were taught about them at school.”