Financial pressures for the younger generation
The recent interview with Andrew Bailey, chief executive of the Financial Conduct Authority grabbed attention today where he talked about the build-up of debt amongst young people. But the most troubling aspect was the comment that young people were having to borrow just to cover basic living costs. Mr Bailey even said: “We should not think this is reckless borrowing. This is directed at essential living costs. It is not credit in the classic sense, it is [about] the affordability of basic living in many cases.”
Our own research earlier this year found that 41% of employees aged 16-34 worry about how they’ll get through the month on the money they earn. Research carried out on behalf of the Personal Finance Education Group (pfeg) found that just 5% of UK adults believed that school leavers were equipped with the financial skills and knowledge to manage their finances. With more financial products than ever before, pfeg stated that it was even harder now to manage finances, due to the emerging technologies such as online banking and an increasingly cashless society. Furthermore, research from Neyber found that 48% of employees are borrowing to meet basic financial needs.
Our research found a desire amongst young employees for financial education provided by their employer. 29% of 16-34 year olds wanted to learn how to manage and pay down debts, whilst 30% wanted to better understand how they could live within a budget. 87% of 16-34 year olds highlighted at least one thing they would hope to get out of financial education in the workplace.
We have developed a wellness programme that incorporates not only financial wellness, but also introduces physical and mental health. Financial worries not only affect the individual concerned, but can impact on their employer too, where 58% of employees who said they struggle to pay their living costs each month, also admitted that their financial worries affect their work. It’s an area that many employers are now giving serious thought to addressing.
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