Young people ‘anxious’ about spending money

Young adults need to be given the skills and confidence to manage their finances.

This is the view of HSBC UK, following a joint survey with Young Enterprise that found nearly two-thirds (63%) of 16 to 24-year-olds worry about spending money.

And that figure rises to 64% among just 16 to 19-year-olds.

Meanwhile, figures show that almost six in ten people aged 16 to 19 said they feel guilty when they spend money.

Why are young people feeling so uneasy?

If you’re afraid of something, it might be partly because you don’t know much about it or understand it very well.

And that’s often the case with money, in particular.

So the research could suggest young people need to be empowered to manage their money and make financial decisions.

“Financial confidence starts early,” said Natalie Gregoire-Skeete of HSBC UK.

“These findings show just how important it is that young people have access to trusted, judgment-free financial education.

“When young people feel unable to save and anxious about spending, it’s a clear sign we need to do more collectively to help build the skills and confidence they need for the future.”

Sarah Porretta, chief executive of Young Enterprise, added that the research shows “a generation under real pressure”.

“They have grown up through first the Covid pandemic and then cost-of-living challenges and are worried about spending,” she said.

Would you pass a financial literacy test?

A lack of financial knowledge among young adults was recently laid bare in a money literacy test carried out by Shepherds Friendly.

Less than one in ten (9%) 18 to 24-year-olds passed the test, compared with more than a third (34%) of people aged 55 and above, and one in four (24%) overall.

Younger adults were found to have much lower confidence and understanding on nearly all financial topics.

For example, 56% of 18 to 24-year-olds said they don’t understand pension planning, and 55% aren’t confident in choosing the right ISA.

A similar proportion (51%) of 25 to 34-year-olds said they struggle to manage their finances because of rising costs, while 46% said money worries have led to them losing sleep.

School curriculum is set to change

These findings are a real worry, but there is hope at least that the next generation will be able to make more informed and confident financial choices.

From September 2028, money matters will be taught as part of compulsory citizenship lessons - alongside other vital life skills such as spotting fake news and understanding climate change.

We’ve been calling for better financial education for young people for some time, as we’ve seen firsthand how many people wish they’d been taught about money earlier.

In a poll of people who’ve come to us for help, more than nine in ten (94%) said they didn’t get any financial education when they were younger.

But notably, 80% said they thought being taught about topics like budgeting and saving would have made a difference to their situation.

These aren’t just numbers. 

They’re real people convinced their lives could have turned out differently if they’d understood how money works.

So improvements in the quality and provision of financial education can’t come a moment too soon.