University costs eating into first-home dreams

The costs associated with University, training and transition into adulthood are increasingly taking priority over homeownership ambitions for young adults, according to new research by Skipton Building Society.

The findings reveal that while three quarters (75%) of young adults considered using their matured Junior ISA savings towards a future house deposit, only 22% ultimately used the money for that purpose. Instead, education emerged as the most common use of JISA funds, with more than one in four using their savings to help fund their studies.

As young people turn 18 and take greater control of their finances, the research suggests that competing financial pressures and cost of living are facing a generation trying to manage immediate needs over long-term aspirations. Almost a quarter (24%) used the funds to help cover everyday living costs, while one in five (20%) spent the money on socialising, hobbies or treating themselves.

The data showed that 75% considered using the money towards a future house deposit, only 22% used the funds. 24% used the money to cover everyday living costs whilst 14% used the savings to pay off debt

With nearly two-thirds of young adults (66%) stating they would do something differently if making the decision again, the research suggests there is a strong demand for a clearer route from savings into homeownership. 

Jazz Gakhal, CEO of Money at Skipton Building Society, said “Following the Government’s confirmation of the new First Time Buyer ISA, there is an opportunity to create a clearer pathway from childhood saving to homeownership. Giving eligible young adults the option to move some or all of their matured Junior ISA savings into the new First Time Buyer ISA could help more families turn years of careful saving into a meaningful step towards owning a home. Junior ISAs launched in 2011, so the first cohort able to hold one from birth will turn 18 in 2029, the same year the new First Time Buyer ISA is due to launch. Putting this pathway in place from the outset would give those young people a clearer choice when their savings mature.”