Many young people could be storing up problems for the future because they lack financial knowledge and confidence.
According to a Yorkshire Building Society (YBS) study, only 56% of 16 to 27-year-olds know how to budget, and just 58% have set themselves financial goals.
Meanwhile, 39% of people in this age group said they don’t have the confidence to make important financial decisions - that’s twice the figure for the wider population.
And this lack of financial knowledge is having real-life consequences.
For example, young people were found to be more likely to be in debt than their older counterparts.
Figures also showed that over one in three are falling behind or missing at least one debt payment through the year.
In addition, 16 to 27-year-olds were found to be more likely to fall victim to identity theft and online scams, despite typically spending more time online than older adults and having grown up in a digital world.
Young people don’t know who to ask for financial advice
Part of the problem may be that young people know where to turn for support on financial issues.
In fact, 40% of 16 to 27-year-olds said they don’t know who to ask for financial advice, compared with 24% of the overall population.
Meanwhile, 41% said they don’t know which sources of advice they can trust, compared with 32% across all age groups.
Many were found to have previously turned to family members, friends and online influencers for financial advice.
But interestingly, more than half said they believe managing money should be part of the formal education provided by schools.
Better financial education needed, says YBS
In response to the findings, YBS has urged the government to make financial education part of the primary and secondary school curriculum nationwide, and improve the breadth and quality of the subject.
Although financial education is currently on the secondary school curriculum in the UK, it is also available at primary level in Scotland and Wales.
And even though financial education has been on the national curriculum since 2014, only 42% of young adults say they had been taught about money at secondary school.
Chris Irwin, director of savings at YBS, said: “With such high numbers of young people expressing a lack of confidence in their knowledge in key areas of finance and falling into potentially damaging behaviours, it is clear that young people need to be entering adulthood armed with more knowledge and confidence when it comes to money.”
He added that consistently delivering financial education from a younger age will help give people a good start in life and face future challenges with “confidence and optimism”.
Written by Moneyappi Team
