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Teenage financial know-how 'on the rise'

Knowledge of financial products among teenagers has been drastically improved by government education initiatives, Britain's largest quango has said.According to the Learning and Skills Council (LSC) the advent of education maintenance allowance (EMA) has encouraged young people to open bank accounts and consider their savings.Research released today shows that three per cent of 16-year-olds in England do not have a bank account, compared to 39 per cent four years ago; before EMA was introduced.EMA grants young people up to the age of 18 between £10 and £30 a week depending on their household income as an incentive to continue studying at school.Thirty-nine per cent of the 643 teenagers eligible for EMA interviewed by the LSC said they opened current accounts to help them save money, while a higher proportion of respondents said they chose bank accounts based on interest rates rather than those who favoured free gifts.In addition, a third of young people said they felt more financially responsible as a result of EMA â€" which requires teenagers receiving it to have a bank account â€" and a further 16 per cent claimed it prepared them for working life. "Since EMA was introduced in 2004, the rise in participation and increase in the number of young people attaining level two qualifications - five GCSEs or the vocational equivalent has been dramatic," commented the government's skills minister, Phil Hope.

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