Credit, Collections & Insolvency News
Research from Pay.The UK has suggested that school leavers may say they feel confident about money, but many are losing cash due to poor everyday money admin habits.
The survey of over 2000 school-leavers aged 16-19 found that while seven in 10 (69%) claim they feel confident that they have the skills and ability to manage their money, nearly a third (30%) admit they are losing cash because they are failing to keep track of where they’re spending it. In the last six months, over a third (38%) of school-leavers said they have paid for a subscription they forgot to cancel, while a quarter have had an unexpected charge (24%) and nearly a fifth (17%) admit to missing a payment.
Beneath the bravado sits clear financial pressure for young people. Two-fifths (42%) of young school-leavers worry that they will not earn enough to live independently, over half (51%) still live with their parents, and around three in 10 (29%) are worried about unexpected costs or debt.
School-leavers are also thinking in the short-term about their finances, with a very practical definition of ‘adult money’. These include moments such as getting a full-time job (25%), moving away from home (24%), budgeting so they do not run out of money (24%) and receiving a first pay cheque (23%).
The research suggests that for school-leavers, the ‘right’ bank account is increasingly defined by how well it supports day-to-day money management. The top areas where they want support are money management and tracking (36%), budgeting and financial planning (29%) and managing Direct Debits (27%). There is a similar demand for help with cash flow (26%) and subscriptions (25%). These concerns are feeding directly into banking behaviour and influencing what young people want from their banking partner.
Young people are not opposed to switching, with only 4% saying that nothing would make them consider switching. Importantly, one in five (20%) say they would consider switching to a bank account that better fits their needs. Still, many are being held back by uncertainty about how to choose the right bank account (26%), fears about losing access to money (23%) and worries about pay going into the wrong place (21%).
When asked what could prompt them to switch, school-leavers point to clear, practical benefits. Around a third (32%) say cashback or rewards, around three in 10 (27%) cite better savings rates, while around a quarter (26%) point to free subscriptions or perks.
John Dentry, Product Manager of the Current Account Switch Service at Pay.UK, said “The younger generation may feel confident about their finances, but this research shows that everyday money admin is already catching many out. The right bank account can help with managing those money mistakes, from keeping track of day-to-day spending to staying on top of Direct Debits and subscriptions.
“At a time of already significant change for young people, the issue with switching is often not a lack of interest, but uncertainty. The Current Account Switch Service is designed to give certainty and confidence when moving accounts. It is free to use, the switch is completed in seven working days, and backed by the Current Account Switch Guarantee, meaning people do not need to worry about losing access to their money or payments going to the wrong place. That means everyone, including young people, can move to a better-matched bank account with confidence.”