Credit, Collections & Insolvency News
Young people (16-27) are facing more financial hurdles than previous generations, despite much of Generation Z being the first to benefit from financial education being added to the national curriculum ten years ago, according to a new report released by Yorkshire Building Society.
The report found that young people are facing acute pressures meaning over 5 million have not saved anything in the last two years – with over three quarters saying it is not because they don’t want to, but because they can’t afford to, with their spending concentrated on essential goods and services.
With cost-of-living pressures still impacting many, almost a third admitted they would not be able to withstand their outgoings increasing by £100 or more and a third confirmed they had fallen behind with debt repayments.
The findings also suggested that this younger cohort face greater barriers to their financial wellbeing than any other generation. Almost two thirds (63%) of the adult population from older generations agreed with this sentiment. Yet they are a generation that have a willingness to improve, spending more time managing their money than the wider population and are more active in trying to improve their financial skills than other adults, with 43% saying they seek out financial education resources.
The report suggests that financial education can play a positive role in developing young people’s confidence to achieve their savings goals, yet just two-fifths (42%) of young people said they had received financial education at secondary school, despite it being on the national curriculum since 2014.
Members of Generation Z who reported receiving financial education at school were more likely to say they felt knowledgeable about key financial concepts such as tax (+11%pts), debt (+9%pts), and mortgages (+8%pts), than those who did not. Receiving financial education has also helped make members of Generation Z more optimistic about their personal finances and the future.
However more younger people (68%) said they were stressed about their finances than those in older generations (48%) and were less likely to say they felt knowledgeable about important topics such as budgeting, credit, interest, debt, tax, mortgages and pensions. Over a third (39%) of Generation Z respondents said they lacked the knowledge to make important financial decisions, compared to a fifth (22%) of the general population.
Chris Irwin, Director of Savings at Yorkshire Building Society said “It’s sobering to see the stark reality of just how many of our young people are struggling simply to pay their bills and to build the financial safety net that we all need in a crisis. This research highlights the challenges that many young people face when it comes to their finances. Despite a willingness to learn and save, many are unable to do so because they struggle to meet their outgoings.
“Many young people also said they lack confidence to make important financial decisions, and only two-fifths said they had received any formal financial education at school – this is despite it being on the national curriculum for ten years.
“Delivering financial education consistently in schools could help more people enjoy the benefits reported in the research – more optimism and better understanding of topics like debt, budgeting, tax and mortgages.
“To help more people build confidence when it comes to finances, we believe there is more that can be done by the Government as well as by other organisations like ourselves. This is an issue that requires attention as a matter of urgency to ensure we can address the serious challenges young people are experiencing, receiving a comprehensive financial education in a meaningful and timely manner from an early age is a key recommendation from our findings.”
