ONE in five of those aged 12 to 17 in Scotland is unable to correctly read a bank statement, raising concerns about lack of money skills among young people, a new report has found.

The Money Advice Service study also found that 21 per cent of this age group do not keep track of their money at all, while 29 per cent of them only keep track of their money in their heads.

On the other hand, four in five children in Scotland talk to their parents about money, which can help them to develop money skills.

The survey found that children whose parents involved them in discussions about money and allowed them to experience using money are more likely to develop vital financial skills which boosts their ability to save, budget and plan ahead financially in later life.

However, children who are not included in these discussions, or do not experience using money, risk being left behind.

Finance experts urged parents to talk to their children about money to help them develop their financial skills.

Allison Barnes, Scotland manager for the Money Advice Service, said: “There are many ways that parents can start to encourage their children to interact with money from a young age.

“We know that children learn best when they gain practical experience with money, and allowing them to make decisions and learn from their mistakes lays the foundations for better money management skills as they grow up.”

Only one in five parents of 12 to 17-year-olds have never talked to their children about the risks of borrowing money and the impacts of debt.

The report found that there is still an opportunity to increase levels of financial education in the classroom.

Currently, less than half (46 per cent) of children aged seven to 17 surveyed in Scotland said they had learned about money management at school and just six per cent have talked to their teachers about money.

However, nine out of 10 young people who had learned about money management at school said it was useful.

The Money Advice Service report is being launched as part of Financial Capability Week.

In total, 4958 children and young people and their parents across the UK took part in this research from March to June 2016.

This included 604 children and young people and their parents in Scotland.