YoungAdults’Financial
Capability
AreportbyTinaHarrison,CarolineMarchant
andJakeAnsell
www.moneyadviceservice.org.uk
www.fincap.org.uk
YoungAdults’FinancialCapability
Contents
Executivesummary
01
Introduction
03
Method
04
Aimsandobjectives
04
Goalsandplanning
05
Financialconfidence
11
Engagementandbarrierstoengagement
19
Opportunitiestoengageyoungadults
26
Conclusions
28
moneyadviceservice.org.uk
YoungAdults’FinancialCapability
ExecutiveSummary
ThisreportbuildsontheMoneyAdviceService(MAS)UKFinancialCapabilitySurvey(2015).Itspecificallyexploresthe
‘youngadult’lifestageinrelationtotheFinancialCapabilityStrategyFrameworktobetterunderstandtheabilityofyoung
adultsinmanagingday-to-dayfinances,planningaheadandnegotiatingfinancialdifficulties.Todate,youngadultshavenot
beenakeyfocusofpolicyandrecentlyMAShashighlightedthatmanyyoungadultsfeeltheyexperiencefinancialdifficulties
intakingresponsibilityfortheirownfinancialmanagement.Thisreportexploresyoungadults’financialcapabilityindetailvia
a‘deepdive’intothesurveydatawhichencompassed744youngadultrespondentsfromacrosstheUKbetweentheagesof
18and24.Inparallel,fivefocusgroupswerecommissionedtochallengeandfurtherunderstandthenuancesofthe
quantitativedata.Thefocusgroupscomprisedninemalesand14femalesbetweentheagesof18and241yearsfroma
varietyofeducational,workanddomesticsituations.Dataanalysisaddressedthefollowingkeyareas:
n
financialgoal-settingandplanning;
n
confidenceinmanagingmoneydaytodayandmakingfinancialdecisions;
n
engagementandbarrierstoengagement;and
n
opportunitiestohelpsupportyoungadults’financialcapabilityinthefuture.
Goalsandplanning
Youngadultswerebothmorelikelytohavefinancialgoalsoverthenextfiveyears(69%)andtohaveplanstoachievethose
goals(41%)(comparedtoalladultsaged18+).Yet,thegapbetweenhavinggoalsandhavingplanstoachievethemwas
widerthanforallotherage-groups,suggestingadifficultyinfinancialplanning.Overallyoungadultplanningprofileswere
dividedintothreegroups:Planners,DreamersandDrifters.ThePlannerswerethemostindependentandshowed
confidenceandforesightinplanningandtendedtosaveforthefuture.TheDreamers,althoughhavingfinancialgoals,were
lessabletomakefinancialplans,werelessconfidentinmanagingtheirmoneyandtendedtobeanxiousaboutthefuture.
TheDrifterswerelesslikelytohaveanyfinancialgoals,hadlittleconfidencewiththeirmoneyandtendedtobethemost
dependentonfamilyfinancialsupport.Planninginthemaintendedtobefocusedontheachievementofshort-termgoals
and‘save-to-spend’planning;eventhePlannerstendedtosetonlyshort-termgoalsandjuggledthedemandsofplanningfor
thefuturewithmoreimmediatepressures.TheDrifterstendedtowardspassiveacquiescence–acceptingthatdreamswould
notberealisedandlong-termfinancialcomfortwouldneverhappentothem.Youngadultspreferredtokeepday-to-day
moneymanagementsimple.Thisledtoa(potentiallyfalse)senseoffinancialconfidenceinthepresent,butcoupledwith
longer-termfearsforfinancialsecurity.
Financialconfidence
Youngadultshadthelowestlevelsoffinancialconfidencecomparedtootheragegroups.Only45%ratedthemselvesas‘very
confident’(comparedto58%ofalladultsaged18+)andfemalesgenerallyratedthemselvesaslessconfidentthanmales.
Youngadultswhowereinfull-timeemploymentandnolongerlivingathomeexpressedmoreconfidenceinmanaging
moneyandmakingfinancialdecisionsthanstudentsoryoungadultslivingintheparentalhome.Youngadultswithsavings,
creditcardsandmortgagesweremoreconfidentthanthosewithout,andover-indebtedyoungadultswerelessconfident
thanthosewhowerenotover-indebted.
Confidenceseemstocomefromexperienceratherthanagealoneandexposuretoawiderrangeofsituations,financial
productsanddecisions.Manyyoungadultstalkedoflearningbyexperience.Bothpositiveandnegativeexperiencescould
haveabeneficialimpactonfinancialcapability,especiallylearningfrommistakes.Sometransitionsprovidedmore
opportunitiestoexperiencefinancialproducts,suchasthetransitionintotheworkplacecomparedwithfull-timeeducation
whichpossiblyexplainsthelowerlevelsofconfidenceexpressedbystudents.
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1
Oneparticipanthasrecentlyturned25.
1
YoungAdults’FinancialCapability
Barrierstoengagement
Therewerenotablebarrierstoengagementwithinformationandguidancesources.Forallyoungadults,whetherworkingor
ineducation,themaintrustedsourcesofinformationandguidancewereparentsorfamily.Beyondthis,therewaslittle
understandingofwheretogoforfinancialguidance–thiswasparticularlytrueoffemalesandDrifters.
Thebankwasoftenacceptedastheonlyotheravenuebutthiswasareluctantrelationshipandbanksweremistrustedby
most.Youngadultswereconfusedaboutfinancialguidanceandadvice,wereunabletodistinguishbetweenmoneyguidance
andregulatedadviceandperceiveditalltobeexpensiveandeitherforthosewithalotofmoneytoinvestorconverselyfor
thoseinfinancialcrisis.Similarly,otherprovidersofguidance–suchastheMoneyAdviceServiceandtheCitizensAdvice
Bureau–weretypicallyseentobeforthosestrugglingfinancially.
Youngadultsdiddiscussfinanceswithpeerswhentherewasasharedreason,suchascomparinginsuranceforholidaysoron
passingtheirdrivingtests.Therewasalsoevidenceofindividualsself-advisingviatheinternet,particularlyGoogle.However,
manyoftheyoungadultsfeltoverwhelmedbythequantityofinformationavailableandexperienceddifficultyfilteringthe
goodfromthebad.
Thenatureofengagementwasinfluencedbyfinancialconfidence.Financiallyconfidentyoungadultsweremorelikelyto
consultprofessionalsourcesofinformationandguidance,suchasbanks,comparedwithyoungadultswhowerenot
financiallyconfidentwhotendedtorelyoninformalsourcesofinformation,suchasfamilyandfriends.Thequalitative
researchsuggestedthatalevelofunderstandingwasnecessarytoengagewithcertainsourcesofguidance.
Youngadultsweremorelikelytobeover-indebtedthanotheragegroups,yetover-indebtedyoungadultswerelesslikelyto
seekdebtadvicecomparedwithotheragegroups.Thereasonsforthelackofengagementwithdebtadvicelargely
dependedonwhetheryoungadultslivedathome,whethertheywereinfull-timeeducationandgender.Maleyoungadults
tendedtohaveamoreover-optimisticviewthattheycouldsortitoutthemselves,whereasfemaleyoungadultstendedto
acknowledgethattheyneededhelpbutdidn’tknowwheretoturn.
Opportunitiestoengageyoungadults
Insummary,thefindingspointedtothefollowingopportunitiestoengageandsupportyoungadults:
n
pinpointing‘teachablemoments’atkeypointsoftransition;
n
identifyingpeer,‘near-peer’ornominatedexpertsforadviceaspointsoftransitionarereached;
n
highlighting‘unbiased’guidanceandexplainingwhatthatmeans–asyoungadultsdonottrustorunderstand
suchtermsinthelightoftheirviewsonthefinancialservicesindustry;
n
developingeducation-basedpracticalskillsfromchildhood–theimportanceofthiswasstressedbymany
participants;
n
buildingonfamilytrustasthiswasbyfarthemostimportantavenueforinformationandguidance(albeit
complicatedbylowlevelsofparentalfinancialcapability);
n
highlightinganincreasedroleforemployers(possiblyviaapprenticeshipschemesandgraduateemployment
schemes)intheprovisionofguidanceortargetedinterventionstosupportkeytransitionalfinancialneeds;
n
buildingononlineopportunitieswhileaddressingoravoidingtheproblemofoverwhelmingchoiceleading
toanxiety.
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YoungAdults’FinancialCapability
Introduction
Theperiodspanningthelate-teensthroughtothelate-twentiesrepresentsatransitionalperiodinthelifecourse,between
adolescenceandearlyadulthood,inwhichindividualsoftenmoveintogreaterindependentlivingandtakeongreater
responsibilityfortheirfinancialaffairs(Arnett,2015).Thisstageofyoungadulthoodisatimewhen:
“mostyoungpeopleinthisageperiodfeellikeneitheradolescentsnor(fully)adults,butsomewhereinbetween.”
(Arnett,2006:113).
Youngadultstodayareexperiencingaverydifferentsetofpersonal,economicandfinancialcircumstancesfromthoseof
previousgenerations.Thereisanincreasingneedforindividualstotakemoreresponsibilityfortheirownfinancialfuture.
Yet,changesinthehousingmarket,pensionsandemploymentpatternshavecombinedtomakethedecisionsindividuals
facemorecomplex.
Theabilityofyoungadultstocopeeffectivelyinthiscontexthasfrequentlybeenraisedasaconcern.Lusardietal.(2010:
375)describeyoungadults’financialknowledgeintheUKas:
“dangerouslylowandpotentiallyinadequatetodealwiththecomplexityofcurrentfinancialmarketsandproducts.”
DespitegovernmentarchitecturebeingintroducedtoimproveconsumerfinancialcapabilityintheUK(Atkinsonetal.2010;
MAS2012),youngadultshavenotpreviouslybeenakeyfocusofpolicyandpotentiallyareindangeroffallingthrougha
financialcapabilitygap.
RecentevidencefromtheMoneyAdviceServicesuggeststhattheyoungarefarmorelikelytosaytheyexperiencefinancial
difficulty‘allthetime’;andaroundthree-quartersofindividualsintheirtwentiesadmittomakingmoneymistakesintheir
firstyearsoffinancialindependencewhichhaveanimpactontheirlivesforyearstocome.2
Setagainstthisbackdrop,thisreportaimstounderstandyoungadults’financialcapability,whatcontributestoitandhowit
canbesupportedanddeveloped.YoungadultsareakeyfocusofthecurrentFinancialCapabilityStrategyfortheUK.3
Thisreportprovidesinsightsintothefactorsthatinfluenceyoungadults’financialgoalsandplanning,financialconfidence
andengagementinfinancialmatters.Suchinsightshelpinformhowtoimproveyoungadults’abilitytomanagemoneywell
daytoday;prepareforandmanagelifeevents;anddealwithfinancialdifficulties.
Tocomplementthisreport,theMoneyAdviceServicecommissionedFamilyKids&Youthtoconductaliteraturereviewof
availableevidenceontheeffectivenessofdifferentmethodsandinterventionsforengagingyoungadults.
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2
It’sTimetoTalk:YoungPeopleandMoneyRegrets.
https://masassets.blob.core.windows.net/cms/mas_money_regrets_online.pdf
3
FinancialCapabilityStrategyfortheUK.http://www.fincap.org.uk/
3
YoungAdults’FinancialCapability
Method
Theanalysiswasbasedonbothquantitativeandqualitativemethodsincluding:
n
secondarydataanalysisofthequantitativedatasetfromtheMoneyAdviceService2015FinancialCapability
Survey;
n
primaryanalysisoffocusgroupsconductedspecificallytoinformthiswork;and
n
insightsfromareviewofpublishedresearchspecificallyonyoungadultsandfinancialservices.
TheFinancialCapabilitySurveycomprisedatotalof3,461respondentsdrawnfromacrosstheUK,ofwhich744wereyoung
adultsaged18–24.Additionally,fivefocusgroupswereconducted,specificallyforthisreport,comprisingatotalof23young
adultsaged18–24.4FulldetailsofthemethodandsamplesareshownintheAppendix.
Aimandobjectives
Theoverallaimofthereportistoprovideadetailedunderstandingofthefactorsthatpromoteorinhibitfinancialcapability
amongyoungadults,thuscontributingdirectlytotheFinancialCapabilityStrategyfortheUK.
TheMoneyAdviceServicedefinesfinancialcapabilityas:
“aperson’sabilitytomanagemoneywell,bothdaytodayandthroughsignificantlifeevents,andtohandleperiodsof
financialdifficulty.”5
Tobetterunderstandfinancialcapabilityinyoungadultsandhowtoimproveit,requiresanunderstandingoftheunderlying
factorsthatpromoteorinhibitit.Withthisinmind,thekeyobjectivesofthereportaretounderstandtheskills,knowledge,
attitudesandmotivationsofyoungadultsandhowthesecontributetofinanciallycapablebehaviours.Accordingly,the
reportcoversthefollowingmainthemes:
n
youngadults’financialgoalsettingandplanning;
n
factorsaffectingyoungadults’confidenceinmanagingmoneywellandmakingfinancialdecisions;
n
factorsaffectingengagementofyoungadults;and
n
opportunitiestoincreaseengagement.
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4
5
Oneparticipantrecentlyturned25.
FinancialCapabilityStrategyfortheUK,p.7.http://www.fincap.org.uk/
4
YoungAdults’FinancialCapability
Goalsandplanning
Nearlyseveninten(69%)youngadultsreportedhavingfinancialgoalsoverthenextfiveyears(comparedto53%of
alladultsaged18+),and41%hadplansfortheirfinancialgoals(comparedto36%ofalladults18+).Itisperhapsnot
surprisingthatahigherproportionofyoungadults,comparedtootheragegroups,hadfinancialgoals:asindividualsmove
throughthelifestages,financialgoals–forexample,forgettingmarried,startingafamilyormovinghouse–arerealised.
Whatisworthnotingistherelationshipbetweenfinancialgoalsandplanningforfinancialgoals.Thegapbetweengoalsand
planningwasgreatestamongyoungadults(seeFigure1).Thissuggeststhatalthoughyoungadultshavefinancialgoals,they
seemlessabletoplanforthosegoals.
Usingregressionanalysis,thefactorsthatexertaninfluenceonyoungadults’abilitytoplanfortheirfinancialgoalsincluded:
attitudes,workingstatus,extentofover-indebtednessandeducationalqualifications.
Specifically,youngadultswhoweremostlikelytohaveplanstoachievefinancialgoalsdisagreedthatthey‘prefertolivefor
todayratherthanplanfortomorrow’,feltitwasimportanttokeeptrackofincomeandexpenditure,wereemployed
(especiallyemployedfull-time),werenotover-indebted,andhadhigherqualifications.
Figure1:Gapbetweenfinancialgoalsandplansforfinancialgoals
Giventhediversityamongtheyoungadultagegroup,clusteranalysiswasusedtoidentifypotentialsub-groupsofyoung
adultswithsimilarcharacteristicsaccordingtoattitudes,goalsandplanning,financialconfidenceandfinancialdependency.
Athree-clustersolutionwasproduced.
Theprimaryclassificationvariableswere:theextenttowhichyoungadultshaveanyfinancialgoalsforthefutureandthe
extenttowhichtheyhaveanyplansforthosefinancialgoals.Basedontheprofiles,thethreeyoungadultgroupswere
labelled:Planners,DreamersandDrifters(seeFigure2).
5
YoungAdults’FinancialCapability
Figure2:Threeyoungadultsub-groups
n
Plannersweretheonlygroupthathadanyfinancialgoalsthatwerealsosupportedbyplanstoachievethose
goals.Theywerethemostconfidentinmanagingtheirmoneyandinmakingfinancialdecisions,andtheleast
likelytobefinanciallydependentonparents.Intermsofattitudes,theyweremostlikelytoseesavingforthe
longertermasimportant(includingsavingforarainydayandalsoforretirement).Theywerealsomorelikelyto
perceivethattheysavedmorethanothersonaverage(seeFigure3).
n
Dreamersallhadfinancialgoalsforthefuturebutgenerallydidnothaveplansinplacetoachievethosegoals.
TheywerelessconfidentinmanagingtheirmoneyandmakingfinancialdecisionscomparedtoPlanners,but
moreconfidentthanDrifters.Intermsofattitudes,theyweremostlikelytofeelanxiousabouttheirfinancial
situation.Theywerealsomostlikelytoperceivethattheysavedlessonaveragethanothers(seeFigure3).
n
Driftersweretheleastlikelyofallthreegroupstohaveanyfinancialgoalsforthefutureoranyplanstoachieve
them.Theyweretheleastconfidentofallgroupsinmanagingtheirmoneyandmakingfinancialdecisionsandthe
mostlikelytobefinanciallydependentonparents.Intermsofattitudes,theyweretheleastlikelytoseesaving
forarainydayasimportant.
Thisshowsacomplexpictureoffinancialdependence/independenceandfinancialplanning:clearlytheextentoffinancial
dependencyhasanimpactonyoungadults’abilitytohavefinancialgoalsandplanforthem.However,livingintheparental
home,buthavingsomeleveloffinancialindependence,canbebeneficial.Furtherdetailsontheindividualcharacteristicsof
thegroupsfromthesurveydataareprovidedinTable1.
Thethreegroupswerealsoevidentinthequalitativeresearch:ofthe23focusgroupparticipants,11wereidentifiedas
Planners,6asDreamersand6asDrifters(seeTableA3intheAppendix).
Engagingincertaintypesoffinancialproductscanalsobeassociatedwithplanning.Forexample,youngadulthomeowners
withamortgageweremostlikelytoplanforfinancialgoals.Havingamortgagewaslikelytoleadtothenecessitytoplanfor
otherthings.Almosttwo-thirds(63%)ofyoungadultswithamortgagealsohadplansforfinancialgoals,comparedwith60%
and63%ofyoungadultsrespectivelyinprivateorsocialrentedaccommodationwhodidnothaveaplanforfinancialgoals.
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YoungAdults’FinancialCapability
Table1:CharacteristicsofPlanners,DreamersandDrifters
Planners
Dreamers
Drifters
Samplesize
37%(278)
36%(264)
27%(202)
Anyfinancialgoals
90%hadfinancialgoals
100%hadfinancialgoals
Zerohadfinancialgoals
Anyplansforgoals
Allhadplansforgoals
99%didnothaveplansfor
goals
Didnothaveplansfor
goals
Confidencemanaging
money
Veryconfidentmanaging
money(60%score8–10)6
Fairlyconfidentinmanaging
money(63%score4–7)
Fairlyconfidentin
managingmoney
(52%score4–7)
Confidencemaking
financialdecisions
Veryconfidentmakingfinancial
decisions(48%score8–10)6
Fairlyconfidentmaking
financialdecisions(69%
score4–7)
Fairlyconfidentmaking
financialdecisions
(61%score4–7)
Financialdependency
Leastlikelytobefinancially
dependentonparents(20%not
atalldependent)
Mostlikelytohavemedium
financialdependencyon
parents(42%score4–7)7
Mostlikelytobe
financiallydependenton
parents(33%score8–10)
Attitudes
52%agreeditisimportantto
keeptrackofincomeand
expenditure
54%agreedthatthinking
abouttheirfinancial
situationmakesthemfeel
anxious
Only20%agreedthat
savingforarainydayis
important
50%agreedtheydonotprefer
tolivefortodayratherthan
planfortomorrow
45%agreeditisimportantto
shoparoundtomakemoney
gofurther
50%agreedthattheydonot
prefertolivefortoday
ratherthanplanfor
tomorrow
37%agreeditisimportantto
savemoneyforarainyday
Tenure
31%livedwithparents;
30%rentedprivately
35%livedwithparents;
37%rentedprivately
45%livewithparents;
25%rentedprivately
Employmentstatus
43%workedfull-time;
35%infull-timeeducation;
25%unemployed
36%workedfull-time;
35%infull-timeeducation;
42%unemployed
22%workedfull-time;
29%infull-time
education;
33%unemployed
MASSegment
26%Struggling;30%Squeezed;
43%Cushioned
22%Struggling;28%
Squeezed;50%Cushioned
23%Struggling;28%
Squeezed;50%Cushioned
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6
Confidenceinmanagingmoneyandconfidenceinmakingfinancialdecisionsweremeasuredona10-pointscale:0–3=notatall
confident;4–7=fairlyconfident;8–10=veryconfident.
7
Degreeoffinancialdependencywasmeasuredona10-pointscale:0–3=lowfinancialdependency;4–7=mediumfinancial
dependency;8–10=highfinancialdependency.
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YoungAdults’FinancialCapability
Thefocusgroupsfurtherexploredtheextentoffinancialgoalsandplanningamongstyoungadults.Fivekeythemes
emerged:
n
thegulfbetweenshort-termgoalsandlong-termdreams;
n
hedonisticattitude–‘you’reonlyyoungonce’;
n
comfortablebetweentransitions–‘I’llcrossthatbridgewhenIcometoit’;
n
delegatetoemployers–‘theywillsortmeout’;
n
passiveacquiescence–‘itwillneverhappenforme’
Figure3:Planners’,Dreamers’andDrifters’perceptionsoftheirlevelofsaving
Short-termgoalswithagulftolong-termdreams
Inthemain,youngadults’goalsandplanstowardsthosegoalswerelargelyfocusedontheshortterm,andprimarilyfocused
on‘save-to-spend’goals–suchassavingforaholiday,acaretc.Nearlyhalf(47%)ofyoungadultsinthesurveyreported
savingforaholidayand30%weresavingforacar.
“Imanagetosaveeverymonthbutit’salwaystopaysomething…I’moneofthesepeoplewhohastogoonliketwoor
fourdifferentholidaysayearsoI’llalwayssavelikemoneyattheendofthemonth,butitliterallygoesstraightoutagain
topayforalltheseholidays.”Nicky(22,FocusGroup2,Dreamer)
Goalsseemedtobedrivenbyshort-termplanninghorizons,evenamongst‘Planners’.Youngadultsseemedtoplantothe
nextmajoreventinlifeorpurchasegoalasillustratedbyKitty(19,FocusGroup1,Planner):
“WhenIcomebackfromAustralia,mygoalistogetacarandpaytheinsurance.”
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YoungAdults’FinancialCapability
orVicky(20,FocusGroup5,Dreamer)whowassavingforatriptotheUSAforher21stbirthdayandwasgivingafamily
memberhermonthlysavingssoshewasnottemptedtodipintothem.Butevensavingfortheshort-termcanbedifficult,as
outlinedbyHarriet:
“Isetmyselfsmallgoalsforlikeholidaysorwhatever.SoI’llsave…acoupleofmonthsandI’llonlysaveforthat.I’m
tryingtosavetogotravelling,butit’shard.”Harriet(21,FocusGroup2,Dreamer)
Thisshort-termismseemedtoleadtolimitedexperienceofproductsbeyondthesimplesavingsaccount,generalinsurance
orcurrentaccounts.Forsome,especially‘Dreamers’,thefutureseemedalongwayoffandtherewasevidenceofdelaying
focusonthelongerterm(suchasmortgages,retirementandpensions)infavourofthepresent.
EvenOlwyn(21,FocusGroup5,Planner)a‘Planner’whowantedtobuyahouseandwassavinghadnopracticalideaofwhat
todonext.Thiswasalsoparticularlytrueamongst‘Dreamers’likePenny:
“WhenIworkedatthelibraryIpaidintoapensionthere,butIwantedtogotoIbizasoIstoppedandItookallthemoney
out,butthenIstarteditupagainwhenImovedtothecouncil,butthenIjuststoppeditlastmonthbecauseIamskint
thisyear.”Penny,(21,FocusGroup2,Dreamer)
Penny’sdreamwastobuyahousewithherboyfriendandshewastryingtoplan,getridofherdebtandsave,butshort-term
temptationwasgettingintheway:
“Iowemyboyfriendmoney.Iowemysistermoney.Ioweeveryonemoney,butI’mactuallyhatingitnow.Butitdoesn’t
causemeanystressorthat,tobehonest,likeIjustthinkIdon’tcare.ButIdowantridofit…I’veworkedoutthatIcan
bedebt-freebyOctober...andIshouldhavemycreditcardandeverythingelsepaidoffbythen.ButnowthatI’mgoing
toCroatia…”Penny,(21,FocusGroup2,Dreamer)
ThiscontrastswithherfriendGinawhowasclearlymoreofa‘Planner’.Sheworkedasanadministratorinapensions
companywhichhadgivenhersomeexposuretopensionsandhadpossiblycontributedtoherheightenedawarenessand
engagementcomparedtootheryoungadults:
“Iknowabitaboutpensions.SoIput4%andmycompanymatchitandalsocontribute9%,somypensionpotisnottoo
bad.”Gina(21,FocusGroup2,Planner)
Guidedbyherboyfriendshealsomanagedhermonthlyfinancescheduleasshestrivedtosaveforadeposit.Yetevenforthe
‘Planners’thedifficultyofself-controlwasstillevidentasGinanotes,sheis“terrible”withmoney:
“Iuseaspreadsheetforeverything!Justtogetthechancetosave,I’llneverprobablydoit.Ilivewithmyboyfriendbuthe
ownshishouse,butIwanttosaveupsoIcanownonewiththeHelptoBuyISAsandactuallygetahouseaswell,but
that’sgoingtobealong,longwayawaybecauseIamterriblewithmoneyso…”Gina(21,FocusGroup2,Planner)
Thistemptation,focusontheshorttermandthedesiretolivewhilstyoung,isdiscussedfurtherinthenextsection.
Pleasure-seekingattitude–‘you’reonlyyoungonce’
Thefocusonminimal,short-termplanningseemedtobefuelledbytheattitudethatthisisthetimeforfunanda‘you’re
onlyyoungonce’attitude.Thiswasparticularlytrueofthe‘Dreamers’and‘Drifters’.Herethetemptationsofhedonism
seemedtobestrongerthansavingforthefuture,andtheshort-termprioritiessuchasthe‘need’for‘atleast’oneforeign
holidayayear,forexample.Formanyparticipantsthereseemedtobe‘plentyoftime’tobesensible,asDonnasuggested:
“IfeellikeI’monly21,Iwanttohavefun,Idon’twanttositinthehouseonaSaturdaynightandthat,likeI’drathergo
outandbewithmyfriends,I’vegotplentyoftimetostartsaving.”Donna(21,FocusGroup2,Planner)
Someparticipantshaddebtsthattheyperceivedwerecontrollable,suchasNickywhowouldratherhavefunnowandpay
backdebtsmoreslowly:
“I’mnotreallyonetosaveforlikeanysortoffutureplansrightnowbutI’vestillgotquiteabitofdebtthatI’mtryingto
payoffandIcouldeasilypayitoffsoquicklybutI’drathernot.”Nicky(21,FocusGroup2,Dreamer)
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YoungAdults’FinancialCapability
Similarly,Lara(21,FocusGroup5,Dreamer),despitefindingitdifficulttomovebackhomewouldratherdothattoavoid
expensiverentandenjoymorefun,delayingherindependence.Mostyoungadultsseemedtohaveaself-awarenessand
seemedtobeabletoregulatetheirspendingtoavoidrealfinancialissuesattheendofeachmonthtoensurethey(nearly)
balancedthebooks.
Eveniftheywerespendingtoomuchtheyseemedtobeawarethatitwasn’tsustainable.Formanyyoungadults,their
hedonisticlifestylewastingedwithanever-presentfearthatspendingmightgetoutofcontrol,soneededclosemonitoring,
butinthebeliefthattheywillbecomemoresensibleinfuture.Formanytherewasthegeneralfeelingthattheycouldn’t
affordtosaveanyway,whichperhapslegitimisedthefocusonthepresentandshort-termsave-to-spendbehaviourevident
fromboththesurveydataandthefocusgroups.Thiswasparticularlythecaseamongstthe‘Drifters’.
Managingfinebetweentransitions–‘I’llcrossthatbridgewhenIcome
toit’
Thisstageofyoungadulthoodischaracterizedbytransitionsandchange:leavingschool,goingtouniversity,startingajob,
leavinghome,renting/buyingahomeetc.Youngadults’planninghorizonsappearedtobefocusedonthenexttransitionor
changepointinlife.Betweentransitions,however,youngadultswerehappytoavoidpro-activechangeintheirfinancial
situation;comfortableintheknowledgethat,intheshorttermatleast,theyfeltthatthingswereincontrol.Consequently,it
wascommonformanytodelayoravoidcertaintransitionssoastoescapeanyassociatedfinancialchange.Helen(18,Focus
Group1,Planner)notedthatsheplannedtoliveathomeagaininthesecondyearofheruniversitydegreetoavoidfinancial
change:‘soI’mjustleavingitthisyear.’
Delegatetoemployers–‘theywillsortmeout’
Frequentlyparticipantsassumedthatplanningandfinancialdecisionmakingcouldbedelayeduntiltheywereinemployment
andsomeofthesedecisionscouldpossiblybedelegatedtoanemployer.Forexample,nurserynurseVicky(20,FocusGroup
5,Dreamer)assumed:“wecouldaskthenursery’saccountant,[or]ourbossmightknowthat”,orOscar,(18,FocusGroup1,
Drifter)whobelievedthatwhenhejoinsthearmytheywillsorteverythingoutforhim“ifheaskedthem”,delegatinghis
financialplanningtohisprospectiveemployer.
Manyoftheworkingyoungadultsknewtheyhadpensionarrangementsbutcouldnotarticulatetheiremployer’s
involvementandthemany‘Drifters’inFocusGroup3feltthattheirlow-paidhospitalityworknegatedemployersupportor
anyhelpwiththeirfinances.Incontrast,theirshort-termcontractsledtotheirsenseofinsecurityandongoing‘drifting’
whichwillbediscussedfurtherinthenextsection.
Passiveacquiescence–‘itwillneverhappentome’
Notsurprisingly,thoseexhibitingpassiveacquiescencetendedtobethe‘Drifters’inlower-paidjobs,oftenrelyingonfamily
tomakeendsmeet.Sometimesparticipantswerecontentwithlowerincomes,enjoyingtheirjoborfollowingambitionsto
travelanddelayingfinancial/otherlifedecisions.
Othersweremoredownbeataboutthefuture,takingadepressiveview,expressinglimitedexpectationsofbeingableto
fundtheirgoals,dreamsorreachtheirpotential–suchasfeelingthattheymightneveraffordahouseorlaunchtheir
ownbusiness:
“Yes,short-termisfine,it’sthelong-termthatyoujustdon’tseeagoalattheendofit,that’stheonlything.”
(Doug,23,FocusGroup3,Drifter).
Afewparticipantswhowereworkinginthehospitalitysectorwereparticularlydownbeataboutthelongterm,citing“lottery
wins”astheironlywayout,oracceptingtheneedtochangethecareerthattheyenjoytoabetter-paidjobthattheymight
notlikeasmuchjusttobeabletofundtheirdreamsofowningahomeorrunningabusiness.
Mostparticipantsexpectedinstabilityintheircircumstancesandfinancesforsometimewithareluctantacceptancethat
theymayhavetoeitherliveatorreturnhomeatsomepointorkeep“throwingmoneyaway”onrenting.
10
YoungAdults’FinancialCapability
Financialconfidence
TheFinancialCapabilitySurveymeasurestwoaspectsinrelationtofinancialconfidence:confidenceinmanagingmoneyand
confidenceinmakingfinancialdecisions.Ingeneral,foralladults(18+)aswellasforyoungadultsspecifically,confidencein
managingmoneyishigherthanconfidenceinmakingfinancialdecisions.Thereisevidencefromthedataanalysisthatcertain
factorsimpactdifferentlyonthesetwoelementsoffinancialconfidence.
Weexploredthelinkbetweenfinancialconfidenceandanumberoffactorsindividuallyandincombination.Thefindings
revealedthatyoungadults’financialconfidence(bothinmanagingmoneyandmakingfinancialdecisions)isassociatedwith:
n
age;
n
gender;
n
education;
n
financialdependency;and
n
financialgoalsandplanning.
Itshouldbenotedthatmanyofthevariablesarehighlycorrelated.Hence,whenusedincombination,theeffectsofsome
individualvariablesarediminished.
Confidenceandfinancialgoalsandplanning
Thesurveymeasuredtheextenttowhichindividualshadanyfinancialgoalsoverthenextfiveyearsandtheextenttowhich
theyhadplansforthosegoals.Intermsofhavinganyfinancialgoals,theanalysisrevealednostatisticallysignificant
relationshipbetweenfinancialgoalsandconfidence,mainlybecausemostyoungadultshadsomesortoffinancialgoal.
Therewas,however,adifferencebetweenthosewhosimplyhadfinancialgoalsandthosewhohadactiveplanstoachieve
theirfinancialgoals.Youngadultswhohadplanstoachievetheirfinancialgoalsweremoreconfidentthanthosewhodid
not.Whilstthiswasalsotrueforalladultsaged18+,youngadultswithhighfinancialconfidence(bothinmanagingmoney
andmakingfinancialdecisions)comprisedahigherproportionofindividualswhohadplanstoachievefinancialgoals:57%of
youngadultswhohadplansfortheirfinancialgoalsscored8-10(outofa10-pointscale)forconfidenceinmanagingmoney,
comparedwith45%ofalladultsaged18+.
Thefocusgroupsexploredpossibleexplanationsforthequantitativefindingsrelatedtofinancialconfidenceandhighlighted
thedifferenceinconfidencebetweenmanagingdaytodayandplanningforthelongerterm.
Day-to-dayconfidenceversuslong-termfears
Youngadultsexpressedgeneralconfidencewithday-to-daymoneymanagementandactuallyasenseofprideinbeingable
tomanageoftenlimitedresources‘somehow’frompay-chequetopay-cheque.Evenwhenfacedwithunexpectedexpenses,
theydidfeeltheycouldcope,despiteagenerallackofsavings,sometimesbyborrowingfromfamilyorpeerstogetthemto
theendofthemonth.Theyallseemedtoacceptthattheywouldnotgooutattheendofthemonthifmoneywastight.
Therelativeconfidenceexpressedinmanagingmoneyday-to-daymaybehighduetolimitedfinancialresponsibilityatthis
stageinlife,reflectingwhatcouldbedescribedas‘falseconfidence’oralackofreallybeingtestedyetfinancially.By
contrast,though,mostyoungadultsappearedtobemuchlessconfidentaboutthelongterm,partlydrivenbyalackof
experienceorunderstandingofproductsandsituationsthattheyhavenotyetencountered.
Moreover,theyreflectedontheircurrentincomesandexpenditureandinabilitytosave.Manyparticipantscouldnotsee
howtheycouldbuildsavingsforthefuture.Beyondtheshort-termcomfortblanketoffamily,therewasasenseoflives
beingonholduntiltheyreceivedasumofmoneyfromsomewhere–familyinheritance(orlotterywin).Thiswastheonly
waysomesawofeverhavingenoughmoneytobuyahouseorstartabusiness.
Long-termconfidenceseemedtobelowduetoalackofconsiderationbeyondtheshortterm;alackofexperienceor
understandingoffinancialdecision-makingbeyondbasicspendingandsaving;andsometimesanapathytowardsthefuture
orgeneralfearofanuncertainfuture.
11
YoungAdults’FinancialCapability
Therewasasenseofreactingtochangesastheyhappenwithshort-termlifeandcareerplanning,forexampleGemma
whonotes:
“ImovedtoEdinburghabout2yearsago.IstudiedZoologyatExeterUniversitybeforethatandnowI’machef,which
wasabitofachangebutagoodone.”Gemma(25,FocusGroup3,Dreamer)
orthemorelaissez-faireapproachofPeter,whohadgotboredwithhishomelandofSwedenandwasworkinginEdinburgh
toraisemoneybeforeembarkingonfurthertravel:
“Idon’tknowexactlywhatmyfutureisgoingtohold...it’sexcellent.”Peter(24,FocusGroup3,Drifter)
Thisshort-termvisionofthefutureisconsistentwiththeacademicviewsofagenerationof‘emergingadults’(Arnett2000)
movingthroughnumeroustransitionsintheirtwentieswithconflictingdesiresbetweentravel,freedom,settlingdownand
career.Suchconflicteitherlimitsyoungadults’abilitytoengageinlong-termplanningorcreatesafearorignoranceoftrying
toplanintoanuncertainlongerterm–bothofwhichaffectconfidence.
Confidence,ageandexperience
Accordingtothesurvey,youngadultsweretheleastconfidentoverallinmanagingtheirmoneyandinmakingfinancial
decisionscomparedwiththeotheragegroups:45%ofyoungadultsratedthemselvesas‘veryconfident’(ascoreof8–10),
comparedwith58%forall18+adultsand74%forthoseofretirementage.
Withintheyoungadultgroup,confidenceinmanagingmoneydoesnotappeartoincreaseacrosstheagesfrom18to24.
(seeFigure4).Infact,therewasaslightdip(notstatisticallysignificant)inconfidenceinmanagingmoneybetweentheages
of19and20.Forexample,33%of20-year-oldsratedthemselvesas‘veryconfident’(score8–10)against44%of18-yearolds.Thismaybeexplainedbythoseyoungadultsin(higher)educationandthedynamicbetweeneducation,work,
experienceandconfidencediscussedfurtherbelow.Intermsofconfidenceinmakingfinancialdecisions,Figure4showsan
increaseinconfidenceacrosstheagesfrom18to24,althoughthisincreaseisnotstatisticallysignificant.
Aroundonethird(38%)ofyoungadultsinfull-timeeducationratedthemselvesas‘veryconfident’inmanagingmoney
comparedwithhalf(50%)ofallyoungadultsinfull-timeemployment.Intermsofconfidenceinmakingfinancialdecisions
only28%ofyoungadultsinfull-timeeducationratedthemselvesas‘veryconfident’comparedwith38%infull-time
employment.
Withregardstoexperienceoffinancialproducts,theownershipanduseoffinancialproductswaslimitedamongyoung
adultsinthesurveydata,whichconstrainedtheextenttowhichthelinkbetweenexperienceandconfidencecouldbe
tested.However,therewassomeevidenceofalink:forexample,youngadultswhohadasavingsaccountandcreditcards
weremoreconfidentthanthosewhodidnot.
Youngadultswhoperceivedtheyweresavingmorethanothersonaverageweremoreconfident.Itisnotpossibleto
ascertainwhetherincreasedconfidenceleadstogreaterengagementinsavingbehaviourorwhetherengagementhelpsto
buildconfidence.Confidencepossiblyworksasbothanantecedenttoengagementandanoutcome.Bycomparison,young
adultswhowerenotconfidentinmanagingmoney(score0–3)werethreetimesmorelikelytobeover-indebtedthanthose
whowereveryconfident(score8–10).
Youngadultswhoownedpropertywithamortgageweremoreconfidentthanthoseinrentedproperty(46%veryconfident
against31%).Havingamortgageoftenleadstoengagementinothertypesoffinancialproductsand
increasesexperience.
Apossibleexplanationcouldbethatwithtime(andage)individualshavemoreexposuretoandaremorelikelytousemore
financialproducts.
12
YoungAdults’FinancialCapability
Figure4:Confidenceandage
Thequalitativeresearchtakesthisfurthershowingamorenuancedpicture,inparticularhighlightinghowexperiencescan
contributetodevelopingfinancialcapability.Positiveornegativeexperiences,particularlyatpointsoftransitionintoadult
life,shapeconfidenceinfuturefinancialmatters,e.g.leavinghome,rentingahome,startingajob,goingtouniversity.
Forexample,Doug(23,FocusGroup3,Drifter)talkedofhowhe“learnedthehardway”.Hedidnotrealisehehadtopay
counciltaxwhenhefirstrentedat18andthebailiffsendedupknockingonhisfather’sdoortogainpayment.Learningby
watchingothers’mistakes,bothfromthefamilyandfrompeers,alsoledtogreaterconfidenceintheirownabilitytoavoid
thesameproblem.
Overalltherewasafeelingthatduringtransitionsthey“muddlethrough”(Gemma,25,FocusGroup3,Dreamer).The
financialramificationsofchangeandparallelexperientiallearninggavethemconfidenceforthenexttime,asexpressedby
Kitty(19,FocusGroup1,Planner):“Iknowabitabouttax.IlearnedmoreabouttaxwhenIstartedtowork”;orLara(21,
FocusGroup5,Dreamer)wholearnedhowtocontrolherfinanceswhenshemovedoutaged18withherboyfriend.
Learningbyexperiencewasparticularlytrueofthosewhohadbeenintheworkingenvironmentsinceage16–18ratherthan
remainingineducation.Ajobhadledtogreaterknowledgeofpensions,savings,taxandevenproductssuchastheHelpto
BuyISA.
Students,however,seemedtogaincomparativelylessexperience,oftenremainingmorefinanciallydependentonfamily,
suchasHelen(19,FocusGroup1,Planner),afirst-yearstudent,whostilllivedathomebecauseitwascheaper,wasinsured
onherparent’scarinsurance,hadinheritedasmallamountofsavingsandwasdependentonparentstosupporther
education.Suchdelayedfinancialresponsibilityseemedtocreatealackofconfidenceinfinancialmattersandmayhelpto
explainthedipinconfidenceinthequantitativeresults.
Manystudentsalsotendedtodeferpersonalresponsibilitytothefuture,confidentinthemomentastheymanageddayto
day.Again,transitionisimportanthere,studentstendedtoonlyworktowardsthenextlifetransition–theendoftheir
education–whichcouldbeseveralyearsaway.
13
YoungAdults’FinancialCapability
Tosummarise,Dan,asecondyearundergraduatestudent,bringstogetherthesetwokeydynamics:theneedtoexperience
changetoreallyunderstandfinancialimplications;anddelayingdecisionsbetweentransitions;heis“justthinkingthisyear”:
“...[E]xperiencekindoftellsyou.Ihavenoidea,becauseno-onereallyknowsunlessyougothroughityourself,doyou?
SolikeatthemomentI’mjustthinkingthisyear,probablynextyear,becauseIhaveafive-yeardegree,soI’vegotthree
yearsaheadofme,soI’llprobablygetto4thyearandbethinkingabout…well,IwanttogotoAustraliaafterwardsand
thenI’llstartbudgetingforthatandI’lldecidefromthat.”Dan(20,FocusGroup1,Planner)
Confidence,parentalsupportandfinancialdependency
Youngadultswholivedwiththeirparentswereleastlikelytofeelveryconfident(ascoreof8–10)inmakingfinancial
decisions(24%)comparedwiththosewholivedinprivaterentedaccommodation(31%)andthoseyoungadultswhowere
homeownerswithamortgage(46%).Theexplanationcouldbethatwhilstlivingintheparentalhomeyoungadultsdonot
needtomakemanyfinancialdecisions.Thisisexploredfurtherinthequalitativeanalysisonconfidence.
Therelationshipbetweenfinancialdependencyonparentsandfinancialconfidenceisnotstraightforwardorlinear(see
Figure5).Youngadultswhowereattheextremeendsofdependency(ie,boththoseexpressinghighfinancialdependency
andthosewithlowfinancialdependency)demonstratedhigherfinancialconfidencethanthosewhohadmoderatefinancial
dependencyonparents.Thisrelationshipholdstrueforconfidenceinmanagingmoneyandforconfidenceinmaking
financialdecisions.Justconsideringthoseyoungadultswhoperceivedthemselvestobehighlydependentfinanciallyontheir
parents,onlyfourineveryten(42%)werelivingintheparentalhome,whereasmorethanhalf(58%)werenotlivingat
home,mainlystudentsinfull-timeeducation.
Youngadultsineducationweregenerallylessconfidentinmakingfinancialdecisionsthanthosewhowerenot(only28%in
educationratedthemselvesas‘veryconfident’against34%notineducation).Therewasnostatisticallysignificantdifference
intermsofconfidenceinmanagingmoney.Therewasalsonostatisticallysignificantdifferenceintermsoffinancial
confidenceforyoungadultsaged18–21ineducationcomparedtothosethatarenot.Thissuggeststhattheissueof
confidenceismainlywithyoungadultsover21yearsofageandineducation,mostlikelystudentsinhighereducation.
Otherresearchsuggeststhatparentalsupportanddependencycanhaveanimpactontheabilityofyoungadultstodevelop
financialindependence.Forexample,youngadults’financialindependencehasbeenlinkedtotheeconomicstatusoftheir
parents.Youngadultswhohavebeenraisedinhomeswithmorewealtharemorelikelytoexperiencepositiveoutcomes
leadingtofinancialindependence(Xiaoetal.2014).
14
YoungAdults’FinancialCapability
Figure5:Confidenceandfinancialdependency
Confidencethroughtrustinandrelianceonthefamily
Formostyoungadults,thefamily,particularlyparents,wasconsideredtobetheonlyrealtrustedsourceofinformationand
guidance,andanassumedsourceofongoingfinancialsupportformostifrequired.Thisbeliefseemedtogivemost
respondentsaconfidencethatallwaswellwithfinancialmatters.
“Igotomymumquitealot.IneededanewphoneandsomymumlentmethemoneyandI’mpayingherbackaweebit
atatime,stufflikethat.”(Harriet,21,FocusGroup2,Dreamer)
Thegeneralbeliefthatthefamilywouldbethereoncallreadywithadviceorfundingseemedtocontributetoagreater
senseofconfidence.Surprisingly,thisseemedtobethecaseevenwherethefamilyhadmadefinancialmistakesin
thepastorwheretherewaslimitedfinancialresourceinthefamily;eveninthesesituations,thefamilywouldbe
consultedfirst.
Ononehand,therelianceonthefamilypresentsanopportunityfor‘teachablemoments’throughthisparticularchannel.
However,withvaryinglevelsofadultfinancialcapability,thismaynotbestraightforwardandsuggeststhatdevelopingyoung
adults’capabilitydependsatleastinpartonthedevelopmentofparentalfinancialcapability.
Mostparticipantsconsideredthemselvestobefinanciallyindependentonaday-to-daybasisandproudofthat.Onlythe
youngestparticipantstillsawhimselfas“…stillkindofbasedoffmyparentsbutthat’sonlybecauseI’vejustfinishedschool”
(Oscar18,FocusGroup1,Drifter)andashedidnothaveajobyethestilllivedathomeandwasfinanciallydependentonhis
parents.Despitethisindependence,ageneralsenseofconfidenceseemedtocomefromknowingthatthefamilywouldbe
theirpersonallenderoflastresort.
Despitethesurveyrevealingahighproportionoffinanciallydependentyoungadultswereinfull-timeeducation,thefocus
groupsrevealedanuneasinessinrelyingonparentsforfinancialsupport.Someyoungadultswereevenadamantthatthey
wouldnotapproachtheirparentsforfinancialsupport,notbecausetheirparentscouldnotsupportthembutbecausethey
feltmorallythattheyshouldnolongerdoso.
15
YoungAdults’FinancialCapability
Yeteventheseparticipantsacknowledgedthattheirfamilywasthebestoptioninacrisisaswasclearinthefollowing
exchangebetweenEric(24,FocusGroup3,Drifter),Doug(23,FocusGroup3,Drifter),Peter(24,FocusGroup3,Drifter)and
Gemma(25,FocusGroup3,Dreamer)whowereover20andhadbeenlivingandworkingawayfromhomeforsometime.
Somedidnotwanttoapproachtheirfamiliesdueto“pride”ordoubtsaboutwhethertheirparentswereinapositiontohelp
them;clearlyDoughadmoreofasenseofentitlement.Allgainedasenseofsecurityinknowingthattheyareluckierthan
otherswhodidnothavefamilialsupport:
Eric:
...ImeanI’dprobablyseekassistancefromfamilyfirst,nomatterhowmuchmypridewouldhatethat.But
that’sprobablywhatkeepsmeinthesortofclear.
Researcher: Isthatthesameforallofyou?
Doug:
Yes,familywouldbethefirstportofcall.
Peter:
Yes.
Researcher: Andareyoucomfortablethattheycansupportyouifyouneededtoorthatthey’renotgoingtosay
“actually,no”..?
Gemma:
Ithinkthey’dtry.Butwhethertheyactuallycanisanotherissue.
Doug:
Mydadisbuyingabrandnewmotorbikethisweeksoifhecan’tjustlendme£100I’llbereally[annoyed]!
Researcher: Andareyouthesame?
Peter:
Yes,theywouldbeableto.
Researcher: Soyou’vegotasortofunderpinninglevelofcomfortthen?
Peter:
Whichwe’rereallyluckyfor.Becausealotofpeopledon’thaveanything.
Otherparticipants,mainlystudents,whohadborrowedfromparentsduringtheirtimeatuniversity,talkedabouthowthey
wereactivelytryingtopaybacktheirdebtsandreducetheirfinancialdependence.Thiswasdescribedasakeytransitionto
financialindependence.Despitethisapparentstrivingforindependence,likethequoteabove,manystudentstookcomfort
fromknowingthatultimatelytheirparentscouldhelpthemifreallyneededas‘lendersoflastresort’.
Interestingly,mostparticipantsassumedthattheycouldmovebacktotheparentalhomeiftheyeverwentthroughatough
period,suchasLara(21,FocusGroup5,Dreamer)whoreturnedhomeayearagowhenshesplitupwithherboyfriendor
Harriet(21,FocusGroup2,Dreamer)whohadenjoyedrentingwithfriendsbutmovedbackhometosavemoneyinorderto
travel.Thisabilitytomovehome(orthecomfortthattheyfelttheycould)alsocreatedasenseofsecurityandconfidencefor
manyparticipants.However,thelikelihoodofreturninghomeandrelyingonparentsforsupportdependsonparental
income(MulderandClarke,2002).Thisisnotanoptionforallyoungadultswhoseparentsarenotinapositiontofinancially
supportthemandcanhavedetrimentalconsequencesforthoseyoungadults,increasingtheirfinancialvulnerability.
Confidenceandgender
Femalesarelessconfidentthanmales
Thegendergapinfinancialconfidenceiswidestamongyoungadultscomparedtoalladultsaged18+(seeFigures6and7).
Almosthalf(48%)ofyoungadultmalesratedthemselvesas‘veryconfident’inmanagingtheirmoneycomparedto37%of
females.Moreover,youngadultmaleswerealmosttwiceaslikely(41%)toratethemselvesas‘veryconfident’inmanaging
financialdecisionscomparedtoyoungadultfemales(24%).
16
YoungAdults’FinancialCapability
Figure6:Confidencemanagingmoneybygender
ChenandVolpe(2002),inastudyofcollegestudentsintheU.S.,foundthatfemalecollegestudentswereless
knowledgeableabout,hadlessconfidencein,andwerelesswillingtolearnaboutpersonalfinancetopics.Theyalsofound
thatfemalecollegestudentsweremorelikelytoengageinhigher-costborrowing.Theextenttowhichthisgendergapin
confidenceisimportantintermsofinfluencingdownstreamfinancialbehavioursis,however,lessapparentintheFinancial
Capabilitysurvey(i.e.,therewerenomajordiscernibledifferencesbetweenmaleandfemaleyoungadultswithrespectto
financialgoalsandplanningandfinancialproductuse).
Figure7:Confidencemakingfinancialdecisionsbygender
17
YoungAdults’FinancialCapability
Oneareawheregender(incombinationwithconfidence)seemstoexertaninfluenceisinrelationtothepropensityto
discussfinancialmattersopenlywithothersandtoseekadvice.Youngadultfemalesweremorelikelythanmalestodiscuss
theirfinanceswithparents/family(seeFigure8).Whilstthisdifferenceisstatisticallysignificant,thedifferencesbetween
malesandfemalesintheirpropensitytodiscussfinanceswiththeirfriends,ortoprefernottodiscusstheirfinancesopenly
withanyone,werenotstatisticallysignificant.Thispattern,though,isconsistentforalladultsaged18+.
Oscar(18,FocusGroup1,Drifter)suggestedthatmoneydiscussionswereuncomfortable.Whenaskedifhewoulddiscuss
anyfinancialdifficultieswithafriend,hereplied:“Notreally.It’skindofatouchysubjectifsomeoneisstruggling”.Perhaps
mentendtobelessopentodiscussingfinancialmattersthanwomen,ormaybemorereluctanttorevealgapsintheir
understanding;thismaybeworthyoffurtherresearchfocusinthefuture.
Figure8:Genderandthepropensitytodiscusshouseholdfinanceswithothers
Gendergaps?
Whilstthequantitativeanalysishighlightedthatyoungadultmalesexpressedhigherlevelsoffinancialconfidencethan
females,therewaslimitedevidenceofthisfromthefocusgroups.Oneexample,though,perhapsillustrateshowmalesmay
portray(orassume)superficialconfidencewhichmaynotnecessarilybesupportedbygreaterexperienceorunderstanding.
Dan(20,FocusGroup1,Planner)wastheoldestand“thecleverone”inhisgroup.Hisfriendsassumedheknewthemost
aboutfinancesandhewashappytoletthisassumptioncontinue.However,hiscontributiontothediscussionsuggested
limitedfinancialunderstanding.Attheendhedidnotethathehadlearntfromthediscussionabouttaxandtravelcosts:
18
Dan:
Kittyhastaughtmealot.
Kitty:
HaveI?Aboutyourself?
Dan:
Aboutfinancesandstuff.
Kitty:
WhathaveItaughtyou?
Dan:
Lots.
Kitty:
Like?
Dan:
Likehavingmorethanonejobyoupaymoretax.
YoungAdults’FinancialCapability
Engagementandbarriers
toengagement
Thesurveyrevealedthatyoungadultsaremuchmorelikelytodiscusstheirfinanceswithparents/family(57%)andfriends
(25)thananyotherage-group,especiallyfemaleyoungadults.Moreover,familyandfriendswerethemostusedsourcesof
informationandadvicebyyoungadultsinthelast12months:fourineveryten(40%)youngadultsconsultedfamilyand
aroundaquarter(26%)consultedfriends,comparedwith22%and15%respectivelyofalladultsaged18+(Table2).
Table2:Sourcesofinformation/adviceusedinthelast12months
(Figuresinpercentages)
All18+
Youngadults
Workingage
Retirementage
(3,461)
(744)
(2,786)
(680)
Family
22
40
25
11
Friends
15
26
18
4
Internetsearch
24
29
26
17
Pricecomparisonsites
24
18
25
22
Moneysavingexpert.com
25
18
25
22
Bank/buildingsociety
20
18
20
22
Insurancecompany
6
6
6
6
Financialadviser
7
4
5
11
Havenotaccessedinformation/advicein
thelast12months
34
27
31
46
Theliteratureonfinancialsocialisationhighlightsthekeyroleofparentsassocialisationagentsforchildrenandyoungadults
(KimandChatterjee,2013).Parentscaninfluenceyoungadultsthroughattitudes,values,directfinancialteachingand
throughobservationofmodellingbehaviours,thusinfluencingengagementofyoungadults.Parentalfinancialsocialisation
hasbeenfoundtoberelatedpositivelytofinanciallearningwhich,inturn,isrelatedtofinancialattitudesandfinancial
behaviour(Shimetal.,2010).
Researchamongyouthsaged15–21foundthatwhentheirparentsdiscussedfinancialmatterswiththemtherewasaweak
butclearimpactontheireconomicbehaviour.Conversely,ithasbeenfoundthatyoungadultswhoseparentsavoidedtalking
aboutfinancesweremorelikelytodisplayproblematiccreditcarduse(WebleyandNyhus,2006).
Confidenceandengagement
Youngadultswhoexpressedhigherconfidenceinmanagingmoneyandinmakingfinancialdecisionsweremorelikelyto
haveusedabankorbuildingsocietyasasourceofinformation,whereasyoungadultswhoexpressedlowerlevelsof
confidenceweremorelikelytohaveusedfamilyandfriendsasaninformationsource(seeFigures9and10).
Almostaquarter(23%)ofthosewhohadusedabankorbuildingsocietyforinformationreportedthattheyfeltvery
confident(score8–10)inmanagingmoneycomparedtoonly8%ofyoungadultswhosaidtheydidnotfeelconfidentin
managingmoney(score0–3).
19
YoungAdults’FinancialCapability
Figure9:Confidencemanagingmoneyandinformationsourcesused
Figure10:Confidencemakingfinancialdecisionsandinformationsourcesused
20
YoungAdults’FinancialCapability
Genderandengagement
Differenceswereevidentbetweenthegendersintermsofinformationsourcestheyused.Ingeneral,femaleyoungadults
weremorelikelytoconsultinformationsourcesthanmaleyoungadults.Higherproportionsofyoungadultfemales,
comparedtoyoungadultmales,madeuseoffamily,bank/buildingsocietyandinternetsearchestofindoutaboutanything
todowithmoney(seeFigure11).Youngadultmaleswereslightlymorelikelythanyoungadultfemalestoconsultfriends.
Theloweruseofinformationsourcesgenerallybyyoungadultmalesmayrelatetothehigherlevelsofreportedconfidence
inmales:maleyoungadultsmayperceivethattheydonotneedtoconsultinformationsourcesasmuchasfemaleyoung
adultsdo.Thisisanareathatwouldbeworthyoffurtherexploration.
Figure11:Informationsourcesusedbygender
Knowledgegap:nowheretogobeyondthefamily
Thequalitativeresearchprovidedfurtherinsightintothepossiblereasonsforrelianceonfamilyandfriendsforinformation
andthepossibleunder-useofothersourcesofinformationandguidance.
Relianceonthefamilyforinformationseemedtobedrivenbya‘knowledgegap’;outsidethefamily,youngadultsdidnot
knowwheretoturnfortrustedguidance/advice–creatingafundamentalbarriertoengagementformostparticipants.
WhenaskedwherehewouldgoforadviceoutsidethefamilyEricsummedupthefeelingsofmanyyoungadults:
“Outsideoffamily,no-onereally.Likefriendsobviouslybutthenyoucan’treallycallthatarolemodelbecauseit’speople
inthesamesituationwhoaretryingtosortsomethingoutandfigureoutabestsortofwayofdealingwithit.Butoutside
offamilythere’sno-one.Sortoflikebackinthe’60sor’50swhereyouhadalocalbobbywhokneweveryonebyname,
usedtoknowallthefamiliesaround,likeactualcommunityspiritandvalues,whichdoesn’treallyexistanymore,it’snot
likeyouhavethat,friendsoffamily,sortofacquaintanceslikeyou’reusedto.”Eric(24,FocusGroup3,Drifter)
21
YoungAdults’FinancialCapability
Therewasaworryingsenseamongyoungadultsofnotknowingwheretoturnforadviceandguidancebeyondaskingthe
familyorotherindividualsknowntothemwhoappearedtobeknowledgeableaboutfinancialmatters–suchas“themanin
thepubwhohasinvestments.”(Doug,23,FocusGroup3,Drifter)orolderfriendsorfamily.
Evenamongfriendsthereseemedtobelimiteddiscussionofmoneymatters.Discussionswithpeersseemedtooccurwhen
itwasrelevanttotheirsharedcurrentsituationsorexperiences.Forexample,Kitty(19,FocusGroup1,Planner)andHelen
(18,FocusGroup1,Planner)passedtheirdrivingtestsatthesametimeanddiscussedthehighcostofcarinsurance.Also,
Kittydidnotrealisehowexpensivetravellingwasuntilshehadtoplanforitandthroughchattingtofriendswhohaddoneit
before,learntaboutinsurance,phonecharges,airporttaxes,visasandsoon:
“Idon’tevenknow,youknow,Ifoundouttheotherdaythatyougetchargedwhenyougooverseaswithyourcard,I
didn’tevenknowthatatall.”Kitty(19,FocusGroup1,Planner)
Therewasverylittleunderstandinggenerallyofthemoneyguidancelandscapeandofregulatedadvice,specificallytherole
offinancialadvisers.Manyyoungadultsassumedthatadvicewasmainlyforthoseintroubleorconverselyforthosewishing
toinvestsubstantialsums;participantsdidnotseethemselvesineithersituation.Morecynically,someyoungadultsfeltthat
financialadviserswere“notlikeus”but“meninsuits”whowouldchargealotbutgivelittlehelp.Limitedsharingof
experiencesalsoreinforcedtheperceptionofhighcostsofaccessingguidance.
Theinformationparadox:toolittle,yettoomuchinformation
Althoughyoungadultsdidnotseemtoknowwhotogotoorwhototrustregardinginformationandadvicebeyondtheir
family,paradoxicallytheyfoundtherewastoomuchinformationavailablewhichtheyperceivedtobe‘overwhelming’in
termsofvolume.Theywerealsounclearhowtojudgegoodorbadinformation.Gemmawaskeentobeginunderstanding
howtosetupherownbusinessbutdidnotknowwheretogoforbestadvice:
“Thereisthatbutthere’sjustsomuchinformationthatit’squitedifficult,likeI’mactuallyintheprocessofwritinga
businessplan,wellIstarteditforsettinguptherestaurantbutit’sjustlike,justsomuchinformationandeveryonesays
thesamebutnotquitethesamestuff...andtheyexpect,alotofwhatwasoutthereexpectsacertainlevelof
understandingtobeginwithaswell.Sotogetsomethingthat’sreallybasicit’squitedifficultIthink.”Gemma(25,Focus
Group3,Dreamer)
Outsideoffamilyandfriends,theinternetwasverymuchthefirstchoiceforinformation,withcasualmentionsof“Googling”
financialinformationfromallgroups,regardlessofwhethertheyfullyunderstandtheinformationtheyreceivedornot.
Table2confirmsthatyoungadultsweremorelikelythanotheragegroupstouseinternetsearches,suchasGoogle,for
informationonmoneymatters,butwerelesslikelythanworking-ageadultstousemorespecialisedformsofinternet
informationsuchaspricecomparisonsitesandMoneySavingExpert.com.Thisisperhapsnotsurprisingasuseofsuchsitesis
likelytobeassociatedwithaspecificpurchaseorintentiontopurchasefinancialproductsthatyoungadultsmaynothavea
currentneedfor.
Intermsofmoreprofessionalsourcesofinformationandguidance,suchasthatprovidedbybanks,buildingsocieties,
insurancecompaniesandregulatedfinancialadvice,thesesourceswereusedfarlessbyyoungadultsthanotherage-groups.
Themainprofessionalsourceofinformationorguidancethatseemedtobeusedbyyoungadultswasbanks.Thisfinding
fromthesurveywasalsosupportedbythequalitativeresearchthatprovidedinsightsintowhyotherformsofinformationor
guidancewerenotused.
22
YoungAdults’FinancialCapability
Trustgap:thedilemmaofthe‘untrusted’bank
Therewasaconsistentyearningforunbiasedinformationthatwasnotoutthereasfarasyoungadultscouldtell,orifitwas
theydidnotknowhowtoaccessit.Theyonlyvisitedabankiftheyfeltinsomewaycaughtinasituationthatforcedthemto
andtherewererealtrustorfearissuesinallgroups.Laid-backtravellerPeter(24,FocusGroup3,Drifter)kepthismoneyin
hisguitarcasetoavoidthebanksduetoan“in-builtmistrust”whichwasstronglysupportedbyhisfriendsinthefollowing
exchangewithEric(24,FocusGroup3,Drifter),Doug(23,FocusGroup3,Drifter)andGemma(25,FocusGroup3,Dreamer):
Peter:
In-builtmistrustagainstthefinancialsector?
Eric:
Yes,andpersonalbankingwise,youmakeaphonecalltolikeHSBCandit’sgreatformakingpayments,
phonebanking,buttoactuallyaskthemforadviceit’sjust…
Doug:
Theydon’tknow.Theysitinfrontofacomputer,theytypeyournameintotheirscreenandthentheyread
outtheresponse,whichcomesuponthescreen.That’swhattheydo.
Gemma:
Andsuggestthatyougetacreditcard.
Doug:
Yes.
Eric:
Creditcards,justtheworstinventionintheworld,youcan’tgetacreditscoreunlessyouhaveacreditcard
butyoucan’thaveacreditcardunlessyouborrowmoneyyoudon’thave.Andthenpaybackthatmoney
youdon’thavewithinterestontopjustsoyoucangetacreditscoresoyoucanborrowmoremoney.Thisis
whywedon’ttrustbanks.Everythingtheydoistotakeourmoneyandkeepit,ortotryandscrewyouover
inthelongrun.Butthentheyfalsifyinformationandnotactuallytellingyouthe
fullstory.
Interestinglyitistheirperceptionofabank’sabilitytogivetrustedguidanceandadvicewhichwasquestionedratherthan
thebank’smanagementoftheirpersonalbanking.Also,Ericandhisfriendsweretalkinggenerallyaboutthe“financial
sector”or“banks”andtheirdesireto“screwyouoverinthelongrun”whichmayalsosuggestasocietalbarriertotrustingin
theoutcomeoflong-termfinancialplanning.Itisworthnotingthatfouroutofthefivefocusgroupsquotedexamplesof
beingconfusedaroundcreditcardguidance.Kittyrecalledtheguidancereceivedinschool:
“inschoolweweretold‘don’tgetacreditcard’becauseapparentlyitgetsyouintosomuchdebtandstuff.”
(Kitty,19,FocusGroup1,Planner)
Yet,whenKittywenttothebanktoopenasavingsaccountshewasofferedone,whichshefoundconfusing.
Beyondthisconfusionandfundamentallackoftrust,participantssuchasGemma(25,FocusGroup3,Dreamer)
alsofelt“judged”whenshewentintoabankandallgroupseitherbemoanedalackoforstruggledtoimaginea
crediblealternative.
Doug(23,FocusGroup3,Drifter)alsomentionedhow“theysitinfrontofacomputer”andthislackofpersonalisationwas
discussedinFocusGroup2,oneofthemoreconfidentgroups,yetstillmistrustingofbankengagement.Shapedby
previouslypositiveexperiences,Joevisitedhisbankto“actuallyspeaktothem”for“financialreviews”;arealplanner,hestill
worriedabouttheirinterferenceinhisaffairs:
“Everycoupleofmonthsthebanksortofphonemeupandgo‘you’vegotafinancialreview’,soI’llgoinandactually
speaktothemandthey’llgo‘wellactuallythisaccountisbetterforyou’.Butbecause,likeIknowI’vegotacoupleof
holidayscomingupanddifferentthings,I’vegotlike12differentbankaccounts.ButeverytimeIgointoopenup
they’relike‘oh,you’vegotlotsofbankaccounts’,andI’mlike‘no,pleasedon’ttouchthembecause...’”
Joe(22,FocusGroup2,Planner)
23
YoungAdults’FinancialCapability
YetevenconfidentJoewasconcernedaboutlackofpersonalisationasbankstaffwereboundbycomputerscriptswhen
answeringquestions.Theycouldnottellhimhowmuchtosavetobuyahousesoherevertedtowhatmostyoungpeople
didinthisstudy–heaskedhisfatherforadvicewhenitcomestomortgageplanning:
“...becausealthoughI’vegotaHelptoBuyISAthebankmanagercouldn’ttellmeifIsavedxamountthenIwouldbeable
tobuyafterthis.AndthenIgotmydadtoworkitoutandhewaslike‘that’syourfigureandit’lltakeyouthreeyears’or
whatever.”Joe(22,FocusGroup2,Planner)
Worryinglythislackoftrustinbanksstartedfromayoungage.Evenschool-leaverOscar(18,FocusGroup1)wascynical:
“banksarebiasedandtheywillalwaysbebiased.”
Barrierstoengagingindebtadvice
Youngadultsweremorelikelytobeover-indebtedthantheoverallpopulation.Butover-indebtedyoungpeoplewereless
likelytoseekdebtadvice.Thesurveyrevealedthat24%ofyoungadultswereover-indebted(comparedto20%ofalladults
aged18+),yetonly10%ofover-indebtedyoungadultswereseekingdebtadvice(comparedto17%ofallover-indebted
adultsaged18+).Table3showsthereasonsfornotengagingindebtadvice.Oneineveryfour(43%)youngadultswhowere
over-indebtedandwerenotseekingdebtadvicefeltthattheycouldsorttheirownmoneyanddebtissuesoutand23%felt
thatthingswillgetbettersoonanyway.ThissentimentissummedupbyNicky:
“I’mnotreallyonetosaveforlikeanysortoffutureplansrightnowbutI’vestillgotquiteabitofdebtthatI’mtryingto
payoffandIcouldeasilypayitoff,soquickly.Iwouldrathernot,Iwouldrathergooutandspendit.Like,peoplesayyou
canjustpayitoffwhenever…”Nicky(22,FocusGroup1,Dreamer)
Aroundone-fifth(21%)ofover-indebtedyoungadultswhowerenotseekingdebtadvicestatedthattheyhaven’thadtimeto
andwhilst18%realisedtheyneededadvice,theyalsodidn’tknowwheretostart.
Table3:Reasonsfornotengagingindebtadvice
Figuresinpercentages(basedonthosewhoareover-indebtedandnotengagingwithdebtadvice)
All18+
(525)
Youngadults
(146)
Workingage
(502)
Retirementage
(23)
Icansortmyownmoneyanddebt
issuesout
39
43
40
30
Thingswillgetbettersoonanyway
19
23
20
0
Imighthavetopayinordertoaccess
advice
15
17
15
13
Ihaven’thadtimeto
13
21
14
0
Theirservicesarenotforsomeonein
myfinancialsituation
11
17
11
13
IrealiseIneedadvicebutdon’twant
tothinkaboutit
11
14
11
0
IrealiseIneedadvicebutdon’tknow
wheretostart
10
18
10
0
Ihavetriedgettingadvicebeforebut
itwasnotuseful
8
8
8
8
24
YoungAdults’FinancialCapability
Thereasonswhysomeover-indebtedyoungadultssoughtdebtadvice,andothersdidnot,canbepartiallyexplainedby:
n
whetheryoungadultslivedwithparents/family;
n
whetheryoungadultswereineducation;
n
gender.
Themaindifferencesofstatisticalsignificanceare:
n
Youngadultslivingwithparentsweremorelikelytofeelthattheycansorttheirownmoneyanddebtissuesout.
Thismaybeexplainedbyincreasedconfidencethatcomesfromrelianceonthefamilyasindicatedearlier.
n
Youngadultsnotineducationweremorelikelytosaytheyrealisedthattheyneededadvicebutdidn’tknow
wheretostart.
n
Youngadultsineducationweremorelikelytosaytheyrealisedtheydidneedadvicebutdidn’twanttothink
aboutit.
n
Maleyoungadultsweremorelikelytohaveanover-optimisticorconfidentviewthattheycansortitout
themselvesorthingswillgetbetter,whereasfemaleyoungadultsweremorelikelytosaytheyrealisedthey
neededhelpbuteitherdidn’twanttothinkaboutitordidn’tknowwheretostart,andwerealsoconcernedthat
theymighthavetopaytoaccessdebtadvice(seeFigure12).
Figure12:Reasonsfornotengagingindebtadvicebygender
25
YoungAdults’FinancialCapability
Opportunitiestoengageyoungadults
Drawingontheevidencefromthesurveyandthequalitativeresearch,anumberofopportunitiesemergetoengageyoung
adultsinmoneyanddeveloptheirfinancialcapability,including:
n
identifying‘teachablemoments’atkeypointsoftransition;
n
makinguseofpeer,near-peerandnominatedexperts;
n
developingeducation-basedpracticalskillsbeyondtheformalschoolenvironment;
n
buildingontheroleofthefamilyasakeysocializationagent;
n
addressingyoungadults’(mis)perceptionsofunbiasedguidanceandadvice;
n
harnessingthepotentialoftheonlineenvironmenttoengagedigitalnatives.
Identifyteachablemomentsatkeypointsoftransition
Thereisanopportunitytoidentifykeypointsoftransitionanddevelopinterventionstoassistatthesekeypoints.
Keytransitionpointscouldbegoingtocollegeoruniversity,movingoutofthe
familyhome,movingcityorcountryorstartingajob.Theneedsforinformation
...ifyougotounistraightfrom
andguidancewillvaryaccordingtoeachtransitionpoint.Youngadultsmovingto
schoolandyoumovetoanothercity,
universitymayneedmore
you’venotgotaclueaboutbillsand
I’mgoingtobeearningabitmorethanwhatI
supportinhowtomanage
rentandstufflikethat,likeitwould
havebeenbefore,it’smyintention,whetheror
billsandastudentloan
bereallydifficult.
notIwillactuallydoit,istoputaweebitaway
whereasthosemovinginto
eachpay,dependingonwhatI’vegot.Iwas
Penny(21,FocusGroup3,Dreamer)
workmayalsoneedgreater
goingtotryfor£50eachpay,andIgetpaid
helpwithsavings,
weekly,butwhetherornotIwillbeabletodo
understandingtaxorevenencouragementforlonger-termplanning.
thatis…orIwilldoitandthenI’llendup
Dependingonthenatureofthetransition(intoworkorcollege,for
goingrightintoit.ButI’mgoingtoattemptit.
example),theremaybeanincreasedroleforkey‘agents’indelivering
effectiveinterventions.Forexample,theremaybeanincreasedrolefor
Donna,(21,FocusGroup2,Planner)
universitiesandemployersatkeytransitionpoints.
juststartedanewjob.
Peer,near-peerandnominatedexperts
Whilstmostyoungadults,especiallytheyoungerindividuals,areenthusiastic
aboutpeerand‘near-peer’guidancetherewasalsoarecognitionthatpeers
oftenarenotmoreknowledgeable.Peerandnear-peersupportseemstobe
mosteffectivewhenthepeerhasalreadybeenthroughasimilarsituation
recentlyandisabletotalkauthoritativelyontheirexperience,givingguidanceon
whattodo–orwhatnottodo.Othernominatedexpertscouldbeindividualsof
similaragewhounderstandthesituationofyoungadults,butmayhavegreater
experienceandresponsibility,suchasasupervisorormanageratwork.Kitty(19,
FocusGroup1,Planner)statedshewould“probably”haveusedsomeonetotalk
toaboutthecostoftravellingabroadandyoungadultswereveryenthusiastic
aboutnear-peernotjustinrelationtofinancialcapabilitybut“lifeskills”in
generalasdiscussedbetweenDonna(21,FocusGroup2,Planner),Nicky(22,
FocusGroup2,Dreamer)andGina(21,FocusGroup2,Planner):
26
…becauseourmanagerhasbeen
throughwhatwe’vebeenthrough,
likeshekindofknowsthestruggles
thatwegothroughwithmoney.She
knowsoursavings,whatwe’ve
savedupfor,whatwe’resavingfor,
likewhatwe’vegotgoingon.She
kindoflikegets–notinvolved–but
sheknowswhatwe’regoingthrough
soshejustwantstohelpout…
Vicky(22,FocusGroup5,Dreamer)
YoungAdults’FinancialCapability
Donna:
Ithinkifyougotpeopleoutfromlikedifferentworkareas,likeyoungpeople,becausethey’llinteractwith
moreyoungpeoplethanolder…
Researcher: Likeyoualmost?
Donna:
Yes,someonelikeourage.
Nicky:
Peermentoringsortofthing.
Gina:
Yes,solikepeoplecanlookandseetheircareerpathandbelike“ohiftheycandothatthenIcandothat”,
andgivethemlikelifeskills,likeinterviewskills...Workshopsandstuff,likejustwhenyougooutforaday
andyougetlike,youknow…Soit’slesslikeformal,it’smoresortoflikeinteractiveaswell,
likeyougettoactualsituationsandyoucansaywhatyouwoulddoandtheycanactuallytellyou,
wellthat’sactuallyquitegoodbutthewaytodoitwouldbethis,ortoworkonthatmore.Actuallygetting
themmoreinvolvedratherthanjusttalkingatyou,saying“thisiswhatyouneedtodo,writethisdown”.
Importanceofeducation-basedpracticalskills
Youngadultswhohadrecentlyleftschoolwerefrustratedthattherewasnotmoredoneinschooltopreparethemforthe
transitionoutofschool.Gemma(25,FocusGroup3,Dreamer)commented:“allIlearntwashowtochangeaplug”;others
notedthatlearninghowtomanagemoneyandfinanceswas“moreusefulthanPythagoras”.
Oscar(18,FocusGroup1,Drifter),justleavingschool,reflects:“Itwouldbegoodto
learnatschool,itdefinitelywouldgiveyouahelp.Canyoudoitatschool?Idon’t
know”.Thelackofunderstandingand/orregretatnoformaleducationin“life
skills”wasoftenpassionatelyfeltandrecognisedbyall,particularlywithinFocus
Group2suggestingafocusat6thformwouldbemosteffective.Itisinterestingthat
theyhighlightthistimeofchangeandsuggestpracticalhelpfromnear-peerswho
havejustbeenthroughthismajortransition–neatlycombiningtwosuggested
possibleinterventions:near-peerguidanceatpointsoftransition.
Ithinkitshouldbesomethingthat’s
broughtintoschools,becauselike
you’retaughtallthisstuffthatyou’re
nevergoingtouse.Butwhendoyou
learnaboutmortgagesandstuff?’
Gemma(25,FocusGroup3,Dreamer)
Buildonfamilytrust
Thereisaneedtobuildonthefamilyasthekeytrustedsourceofinformationandthefirstportofcallformanyyoung
adults.However,thefamilydoesnotalwaysknowbest,andadultfinancialcapabilityvariesenormously.Thusaddressing
youngadultfinancialcapabilityrequiresaddressingparentalfinancialcapabilityaswell.Therewasevidenceofsharing
experienceswithinthefamily.However,thesedidnotnecessarilyleadtoanenhancedunderstanding–asHelen(19,Focus
Group1,Planner)noted:“Idon’treallyunderstandthough.”Hence
I’mkindoflearningwhatI’mdoingbecausemy
modellingbehavioursandpracticesfromfamilymembersalsorequire
brother’sjustmovedupfromLondonandhe’s
supportintheformofeducationtoaddressknowledgeand
justboughtaflat...soIgooutwithhimandmy
understanding.Interventionscouldbedesignedandaimedatthe
mumtoallhisbankappointmentsaboutpaying
familyinsupportingparentstosupportyoungadults.Clearly,support
stuffoffand...Idon’treallyunderstandthough. forfamilymembersandguardiansofyoungadultsisnecessaryto
enablethemtosupportyoungadultsindevelopingtheirfinancial
Helen(19,FocusGroup1,Planner)
capability.Thereare,however,anumberofchallengestoconsider:
n
First,istheassumptionthatfamilymembersareeffectiverolemodels–oftenyoungadultslearnedthroughthe
mistakesoffamilyasmuchasthepositivebehaviour.
n
Second,ishowtoengagefamiliesindiscussionsaroundfamilyfinances,financialplanninganddecision-making,
thusengagingyoungadults.
n
Finally,althoughthefamilyisthemostobviousavenueforyoungadultengagementduetoitsinfluenceinterms
ofsocialisation,itmayalsobethemostdifficulttogetright.
27
YoungAdults’FinancialCapability
Addressyoungadults’(mis)perceptionsofunbiasedguidance/advice
Youngadultstalkedgenericallyabout‘advice’.Theyperceivedthatbothguidanceandadviceprovidersexistprimarilyfor
thosewhoareintrouble.Youngadultstendedtoviewguidanceandadviceinoneoftwoways.Ononehandtheyviewedit
inaveryreactivesense–inresponsetotimesoftroubleormoneyproblems:‘debtadvice’.Hence,thosewhowerenot
experiencingdebtproblemsdidnotfeelthatadvicewasforthem.Ontheotherhand,theyviewedadviceas‘investment
advice’forthewealthy.Hence,theydidnotperceivetheywouldbeofinteresttofinancialadvisers.
Guidanceoradvicewasnottypicallyviewedinamoreproactivewayasameansofdevelopingcapacityandsupportinggood
financialbehaviour.Youngadultsalsotendednottotrustthatguidanceoradvicewouldbeimpartialorunbiasedand
perceivedalackof‘unbiased’guidanceandadvice.Someyoungadultssuggestedthatgeneralinformationandguidanceon
managingmoneycouldbeprovidedbytheCitizensAdviceBureau.Thisonlydemonstratesthelackofawarenessofyoung
adultsintermsofwhatguidanceiscurrentlyavailableandthroughwhichchannel.
Thereareopportunities,therefore,tostrengthenthecommunicationandsignpostingoftheguidanceandadvicethatis
availableandattempttodispelthemythsofimpartiality.Inthisregard,thereareopportunitiestoaddressthedifferences
betweendebtadvice,moneyguidanceandregulatedadvice.Therearealsoopportunitiesforamoreexpandedrolefor
employersintheworkplaceenvironment,forotherpotentialagentsofmoneyinformationandguidance(suchasschools,
collegesanduniversities)aswellasforbanksandotherfinancialinstitutions.
Debtadvice/moneyguidanceversusregulatedfinancialadvice
Manyyoungadultswerenotabletodistinguishbetweendebtadvice,moneyguidanceandregulatedadviceandthe
respectiveprovidersofeach.Forthoseyoungadultswhowereawareofregulatedfinancialadvice,theymainlyperceivedit
tobeavailableonlytoindividualswhohad“alotofmoney”toinvestandfeltthatfinancial
IknowwhenIwentformy
adviserswouldnotbeinterestedinthem.
housebackinGlasgowthe
Regardlessofthenatureofguidanceandadvice,youngadultsperceivedtherewouldbe
mortgageadvisorwanted
costsassociatedwithaccessingitthatcouldbeprohibitive.Indeed,17%ofyoungadultsin
£99beforethey’deven
thesurveywhohadnotaccesseddebtadvicethoughttheymighthavetopaytoaccessit.
talktoyou.
Thisfigureishigherthanforotheragegroups.
Joe(22,FocusGroup2,
Thereisthereforetheneedtoprovidegreaterclarityaroundtherole,accessibility
Planner)
andaffordabilityofdifferenttypesofguidanceandadvice,whichcouldsignificantly
impactengagement.
Employers
Theassumedroleofthecurrent(orfuture)employershouldnotbeignored.Youngadultsseemtoplaceagreatdealoftrust
intheemployer.Thereseemstobeanexpectationbyyoungadultsthattheemployerwillinformandguideemployeesin
financialmatters,notonlyindealingwithpensions,regardlessofwhetheremployersperceivethemselvesinthisrole.
Theremaybeopportunitiestoworkwithemployerstoharnessandchannelbestpracticeandencouragebetterfinancial
managementaswellaslong-termplanningandsaving.Apprenticeshipschemesorgraduateemploymentschemesmay
provideusefulavenuesthroughwhichyoungadultsexperiencingparticulartransitionalneedscanbetargetedwithspecific
interventionsandsupport,linkingtotheidentificationof‘teachablemoments’atkeypointsoftransition.
28
YoungAdults’FinancialCapability
Banks
Itisevidentthattherearemanyissuestoovercomeforthebanksthemselves.Inrelativelysmallermeasureyoungadultsdo
turntobanksforguidanceandadvice,butmainlybecausetheydonotperceiveanalternative.Youngadultsgenerally
acknowledgedaleveloftrustinthebankasreliableandtrustworthyinmanagingtheirpersonalbanking,butwereless
convincedthatthebankcouldbetrustedtoprovideimpartialadvice,perceivingthemas“self-serving”.
Someyoungadultsrecounted“computer-led”discussionsinbanksituationsandaperceivedlackofrealpersonalised
attention.Othersvoicedthefeelingofbeing“judged”.Addressingattitudesandserviceinbankscouldgosomewaytowards
rebuildingtrust.However,positiveexperiencesovertimecanhelptoaddressthisissue.Beyondthechannelsmentioned
above,otherguidanceandadvicechannelssuchasMoneyAdviceServiceandCitizensAdviceBureaux
areperceivedbyyoungadultstobeforthoseintroubleratherthanthoseseekingpro-activeorongoingsupport
andguidance.
Opportunitiesonlinebutchoiceandfearareoverwhelming
Mostparticipantsusedonlinebanking(partlytoavoidcontactwiththebanks)andusedtheinternettosearchfor
information.However,therangeofinformationavailablewasperceivedtobeoverwhelmingand,duetoalackof
understanding,therewasadefinitefearofgettingitwrong.
Appropriatewebsitesandchannelsforguidanceneedtobewellsignposted,widelypromoted,easilynavigatedandmustbe
perceivedtobe‘unbiased’byyoungadultstogainusageandcredibilityamongstthese‘digitalnatives’.Againtheremaybe
theopportunitytopackageguidancearoundkeytransitionsorpointsofchange,ratherthanaroundfinancialproducts,to
acknowledgearangeofspecificneedsforfinancialguidanceduringthesechanges.Furthercredibilitycouldbeachievedby
usingtheexperienceof‘near-peers’inanymaterials,forumsorhelplines.
29
YoungAdults’FinancialCapability
Conclusion
DrawingondatafromtheMoneyAdviceService2015UKFinancialCapabilitySurveyandadditionalqualitativeresearch,this
reportprovidesanoverviewofkeyfactorsaffectingtheabilityofyoungadultstomanagemoneydaytoday,toplanahead,
andtonegotiatedifficulties.Thishasbeenachievedbyexaminingyoungadults’financialgoal-settingandplanning,
confidenceinmanagingmoneyandmakingfinancialdecisions,engagementandbarrierstoengagement.Thereportendsby
outlininganumberofopportunitiesforengagingyoungadultsinmoneyandimprovetheirfinancialcapability.
Thefirstobjectiveofunderstandinggoalsandplanningledtotheidentificationofthreeyoungadults’groups:Planners,
DriftersandDreamers.Eachgroupapproachesmoneymanagementdifferentlybutallhavelargelyshort-termgoalsaround
thenexttransitionintheirlives,ratherthanlonger-termplanning.TheDriftersandDreamersinparticulararetornbetween
pleasure-seekingnowandplanningforafuturewhichmayormaynotmaterialise.
Intermsofthesecondobjectiveoffinancialconfidence,thesurveydatashowsthatconfidenceincreaseswithage.The
qualitativedata,however,suggestsamorenuancedpictureofconfidenceincreasingwithexperienceasindividualsprogress
throughthelifecourseandareexposedtoarangeoffinancialresponsibilitiesandproducts.
Themorefinancialdecisionsaretaken,themoreconfidentyoungadultsareaboutmakingandmanagingfurtherfinancial
decisions.Thisexplainswhystudentsandthoselivingathome,oftenstilldependentonparentalfinancialsupport,express
lessconfidencethanthoseworkingandlivingawayfromthefamilyhome.Differenceswerealsoevident
betweenmaleandfemaleyoungadultsandtheirperceivedlevelofconfidenceinmanagingmoneyandinmakingfinancial
decisions.
Intermsofengagement,youngadultsexhibitedlimitedinvolvementandweremostlikelytoengageindiscussionswith
familymembersandseekguidancefromfamilyandfriends.Regardingthebarrierstoengagement,itissomewhat
concerningthatthemaintrustedsourcesofhelpareparentsandfamily,particularlyasfamilymembersmaynotbe
financiallycapablethemselves.Althoughpeerswereconsulted,theuseofpeerswaslimitedandmainlyrelatedtoashared
financialexperience.Beyondthesetwosources,bankswerereluctantlyusedastheothermainperceivedoption.
Youngadultsweremorelikelytobeover-indebtedcomparedtootherage-groups,butlesslikelytoseekdebtadvice.The
reasonsforthelackofengagementseemedtorelatetoanover-optimismthatthingswillimproveinthefutureandanoverconfidenceinbeingabletomanagedebtproblemsontheirown,especiallyamongstmaleyoungadults.Youngadultsare
morelikelythanotherage-groupstoperceivetheyhavetopaytoaccessdebtadvice.
Youngadultsmakemoreuseoftheinternetandrelianceonself-research,usuallyviaGoogle,comparedtootheragegroups,
leadingtotheperceptionofanoverloadofinformation,andalackofconfidenceorexperiencetonavigatethroughthe
quantityofmaterialasearchprovides.
Thefindingshighlightpracticalsuggestionstoengageyoungadultsbyidentifyingtransitionsand‘teachablemoments’which
canbesharedviatrustedsourcesofinformationsuchasthefamily,peersand‘near-peers’.Theneedtoregaintrustand
demonstrate‘unbiased’guidanceisparamountforbanksorotherfinancialinstitutions,andthedesireforeducation-based
learninginschoolswasvoicedbyparticipantsinthequalitativeresearchinresponsetotheperceivedlackoffinancial
educationwhilstatschool.Therearealsoopportunitiestoworkwithkey‘agents’suchasemployers,collegesand
universitiestosupportyoungadultswithtargetedinformation,guidanceandinterventionsatappropriatetransitionpoints.
Themainopportunity,orchallenge,maybetoengageandbuildonthefamilyastheprimarysupporter,adviserandtrusted
sourceofinformationforyoungadultsbyharnessingthepositiveexperienceoffamilymembers,providingtoolsandsupport
inaculturewhere‘itisjustnottheBritishway’todiscussmoneypro-actively,withinorbeyondthefamily.
Thekeychallengeistheperceptionofyoungadultsgenerallythatfinancialmattersareboring,assuggestedbyPenny(21,
FocusGroup2,Drifter):
“Idon’tthinkthey’reevergoingtobeengagingforyoungpeople.Idon’tthinkpeopleareinterestedinengagingwith
theminthefirstplace.Idon’tthinktheyhaveasmuchofaneedtoengagewiththem.Ijustthink,nooffence,butIthink
peoplehavetosortofgetovertryingtomakefinancefunforyoungpeoplebecauseit’snotfunandneverwillbe.I’mnot
sayingthattobenegative.”
Youngadultsmaynotbe“interestedinengaging”andmaynotfindfinancetobe“fun”butthereareclearanxietieswithin
thisage-groupandtheimperativetosupportandbuildfinancialcapabilityisstrong.
30
YoungAdults’FinancialCapability
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Solheim,C.,Zuiker,V.andLevchenko,P.(2011):‘FinancialSocializationFamilyPathways:ReflectionsfromCollegeStudents’
Narratives.’FamilyScienceReview,16(2),97–112.
Webley,P.andNyhus,E.K.(2006):‘Parents’influenceonchildren’sfutureorientationandsaving.’JournalofEconomic
Psychology.27,140–164.
Xiao,J.J.Chatterjee,S.andKim,J.(2014):‘Factorsassociatedwithfinancialindependenceofyoungadults.’International
JournalofConsumerStudies,38,394–403.
31
YoungAdults’FinancialCapability
Appendix
ResearchMethodandSamples
ThequantitativeanalysisoftheFinancialCapabilitySurveyincludedarangeofdescriptiveandmultivariatetechniquesto
explorerelationshipsbetweenvariables.Theanalysissoughttounderstandtheuniquecharacteristicsandbehaviourof
YoungAdultsasagroupandincomparisontootherrelevantgroupsinthedataset.Thecharacteristicsoftheyoungadult
sampleintheUKFinancialCapabilitySurveydataaresetoutinTableA1.
TableA1:UKFinancialCapabilitySurveyYoungAdultSample
SurveyParticipantCharacteristics
Count
Percentage
Gender
Male
336
45
Female
407
54
Maritalstatus
Single
552
74
Married/livingtogether
176
24
Employmentstatus
Infull-timeeducation
309
42
Infull-timeemployment
248
33
Inpart-timeemployment
135
18
Unemployed
72
10
Housingtenure
Livingwithparents/family
271
36
Rentingprivately
233
31
Rentingsocialhousing
106
14
Homeownerwithamortgage
80
11
Total
744
100
Theaimofthequalitativeresearchwastocomplementandinformthequantitativeanalysis,tobringthequantitative
findingstolifeandofferexplanationsofthefindings.Fivefocusgroupswereconductedbetween19Februaryand13March
2016.Focusgroupswerechosentoencouragesocialinteraction,sharingofideasandexperiencesamongstpeers.Forthis
reason,friendshipfocusgroupswereusedtoenablearelaxed,comfortableenvironmentinwhichtofacilitatesecureand
opendiscussions.
AllparticipantswereresidentincentralScotlandandtheirculturalbackgroundswerepredominantlyBritishandEuropean.
Groupswerepurposivelyrecruitedfromtheresearchers’personalandprofessionalnetworks;onegroupwassourcedviathe
YoungScotcharity.Whilstqualitativeresearchcannotattempttoberepresentative,wenonethelessmadeeffortstoensure
thatthegroupsaccountedforthediversityofYoungAdultbackgroundsandsituations.Thegroupsincludedatotalof23
YoungAdultsbetween18and25yearsofagewithavarietyofeducational,domesticandsocio-economicsituations(Table
A2).Allwereeitherworkingorinfull-timeeducation.TableA3providesdetailedindividualparticipantinformation.
32
YoungAdults’FinancialCapability
Groupdiscussionswerebasedonasemi-structuredformatguidedbyanaide-mémoirethatwasflexibleenoughto
encouragethedevelopmentofemergingthemeswhichwerethendiscussedbetweenallthreeresearchersontheproject
andusedtoinformeachsuccessivefocusgroupandthequantitativeresearchprocess.Similarly,themesemergingfromthe
quantitativeanalysiswerefedintothefocusgroupdiscussions.Alldiscussionswererecordedandfullytranscribed.The
UniversityofEdinburgh’sethicsprocedureswerefollowedatalltimes.Participantssignedconsentformswhichassured
confidentialityandpermissiontouseanonymisedparticipantquotes.Allparticipantsreceivedavoucherfortakingpart.
TableA2:OverviewofFocusGroupSample
SummaryofFocusGroupParticipants
Gender
9malesand14females,18–25yearsold
Personalcircumstances
8full-timestudentsinhighereducation(fromundergraduateyear1toPhD)
11working,straightfromschool
2working,graduatedfromuniversity
2school-leavers,oneintendingtojointhearmy;onetakingagapyearbefore
university
Livingarrangements
10livingwithparents;13livingawayfromparentsinrentedaccommodation
33
YoungAdults’FinancialCapability
TableA3:IndividualFocusGroupParticipantInformation
Pseudonymand
Focusgroup
Backgroundanddetails
Kitty
Aged19,liveswithScottishmotherandyoungerbrotherinEdinburghhavingmoved
permanentlyfromKenyafiveyearsago;stateeducatedinEdinburghfromthatpoint.Left
schoolJune2015andhasbeenworkingincafésandbarssincetoraisemoneytotravelforsix
monthsbeforestartinguniversityinthecityinSeptember2016.
FocusGroup1
Planner
Helen
FocusGroup1
Planner
Dan
FocusGroup1
Planner
Oscar
FocusGroup1
Drifter
Gina
FocusGroup2
Planner
Nicky
FocusGroup2
Dreamer
Harriet
FocusGroup2
Dreamer
Donna
FocusGroup2
Planner
Joe
FocusGroup2
Planner
34
Aged18,Edinburgh-bornandbred,state-educated.LeftschoolJune2015andinfirstyearof
degreeatauniversityinEdinburgh.Livesathomestillandtravelsdaily,gettingusedtohaving
herownfinancesbutprobablynotmovingoutuntil3rdyeartosavemoneyandtoensureshe
feelscomfortablewiththefriendsshewantstomoveinwith.
Aged20,2nd-yearengineeringundergraduateinEdinburgh.BorninUKandbroughtupin
Kenyafromageof9andboardingschoolinSouthAfrica.Classedasaninternationalstudent
sofees/costspaidbyparentsalthoughheworksinthesummertoearnmoney.Hewantsto
traveltoAustraliaafterhisdegreeanddoesnotlikebeingbackintheUK.
Aged18,Dan’sbrother(above).LeftschoolinJune2015,borninUKbutmovedtoKenyaat
ageof7andwenttoboardingschoolinSAfrica.BackinUKnowlivingwithgrandparentsand
appliedtojointhearmyinnext6months,stilldependentonfamilyforfundinganddoesnot
feelindependentatall.HeexpectstheArmywilllookafterhimoncehehassignedup.
Aged21,leftschoolin2012,firstfull-timejobasadminassistantinarchitectofficebutnot
challenging,sochangedtoestateagencyandnowworksforlargeinsurancecompanyinthe
pensionsdepartment.Stillfiguringoutwhatshewantstodo“keepingeyesopen”,“keeps
changing”.Livesathomeandissaving.Shehasaseriousboyfriendwhoisgoodwith
money/planningandideallytheywouldbuyahouseviaHelptoBuyISAeventually.
Aged22,leftschoolin2010,halfwaythrough6thformas“morelearningwasnotforme”.Had
apart-timejobsince15.WorkedinretailatfirstbutnowthankstoSVQ,quickpromotionand
worksforaninsurancebrokerswhoareputtingherthroughfurtherexamswhichsheis
enjoying.Rentswithafriend.
Aged21,leftschoolin2012,didpart-timeworkwhilstatschoolandworkedforcarsales
companywhereshedidherSVQ,nowworkinginaccountsandfinanceforacharityandthey
areputtingherthroughanaccountancytechniciancoursethisyear.Sheishopingtotravel
soonandhasmovedbackhomewithparentstosavemoneyalthoughenjoyedrentingwith
friendsbeforethat.
Aged21,leftschoolin2012–lasttwoyearsthere“myheartwasn’tinit”and“thereforan
easylife”–didworkduringschooltoraisemoney.Afteranumberofdifferentjobsin
hospitalityandsocialcare,shehasjuststartedworkingatalargebankwhichsheseesasa
“career”ratherthana“job”.Shehasalwayslivedathomeandpaysdigs,enjoyslivingat
home.Feelsstronglythatonceleftschoolyoushouldbefinanciallyindependentfromfamily
though.
Aged22,leftschool,tookayearoutbutnevercamebacktoeducation.Hehasworkedatthe
localcouncilsincecomingback,initiallyinadminrolesbutsincedoingSVQ3heisworkingwith
auditandEuropeanfunding.Livesathomeandishappydoingsoashepaysno“digs”.He
hopestotravelagaininthenearfuture.Nearlyboughtahouselastyearandhopestobuyone
soon.
YoungAdults’FinancialCapability
Penny
FocusGroup2
Drifter
Doug
FocusGroup3
Drifter
Gemma
FocusGroup3
Dreamer
Peter
FocusGroup3
Drifter
Eric
FocusGroup3
Drifter
Mark
FocusGroup4
Aged21,leftschoolin2012afewmonthsinto6thyear“itjustwasn’tforme”.Shedidan
apprenticeshipinlibrariesandanSVQ3businessadminandnowworksattheCouncilwithJoe.
Livesandrentswithboyfriendbutwouldlovetobuyownhomealthoughadmitssheisnot
goodatsavingmoneyandenjoysspendingandholidays.
Aged23.OriginallyfromMidlands,England.HemovedtoEdinburghtwoyearsagofollowing
hisgirlfrienduphere.Hehasworkedlargelyinhospitality–barwork–sinceleavingschool,
withasix-monthstinthelpingwithadmin/salessecretaryforasmallfinancialadvisersfirm
whichhehated.Hisplanisshorttermtogetajobinbeersalesandtheneventuallyownhis
ownpub.
25yearsold.GrewupinEnglandandmovedtoEdinburghtwoyearsagoafterstudying
ZoologyatExeter.Sheisnowachef–“abitofachangebutagoodone”.Herfriendswerein
Edinburghsoshehadspenttimehereandjustlikedit.Someoneofferedheracateringjoband
shetrieditforawhileandthendecidedshelikeditandstayed.Shewantstohaveafarmwith
arestaurantattachedandhaveeverythingstraightoffthefarm.Startingtothinkabouta
businessplanbutnotsurehowtodoit.
24yearsold.GrewupinUSAandmovedtoSwedenforuniversitydoingBAUrbanPlanning.
MovedtoEdinburghafteruniversityashisfriendwashereandsaidhewouldlikeitandcould
liverent-freeforacoupleofmonthsuntilhegotsettled.HewastiredofSweden.Hehas
beeninEdinburgh18months,workinginhospitalityandsavinguptotravelagain“pretty
soon”.Hedoesn’tplanandbeyondsavingtotravelhedoesnothavemanyplansas“they
neverreallyworkout”and“Idon’tknowexactlywhatmyfutureisgoingtohold”.
24yearsold.BorninsouthofEngland,movedtoMidlandswhenhewas12andstarted
workinginbarsandrestaurantsthenandhasdoneeversince.Trieddoingachemistrydegree
but“reallydidn’tenjoyit”soleftafter18monthsandwentintopubmanagement.Currentlya
BarSupervisorinEdinburghhavingmovedupheresixweeksagobecausehisfriend(Doug)
saiditwasgreathere.Hewantstoownhisownself-sufficientgastro-pubinthefutureand
nowgettingexperienceandsavingup(althoughhecan’taffordtosaveanythingatthe
moment).
23yearsold.5th-yearundergraduatestudentstudyingComputerSciencesfromHighlandsof
Scotland,onlychild.
Drifter
Bethany
FocusGroup4
Planner
Colin
FocusGroup4
Planner
Vince
FocusGroup4
22yearsold.4th-yearbusinessstudentfromEngland,starteduniversityinLondonandthen
changeddegreeandmovedtoScotland,currentlyapplyingforMasters/PhDandlookingfor
funding.Tendstoworryandsavealot,veryorganisedwithfinancesandneverwantstorely
onparents.However,doesnotreallyplanforthefutureyet.
23yearsold.LivedinEdinburghforlast4yearsandcurrentlyinfirstyearofdoctoral
programmeinRobotics.OriginallyfromAberdeenandthesecondeldestchildoffour,two
youngerbrothersandanoldersister.
23yearsold.FromRomania.HecametoEdinburghfouryearsagotodoaComputerScience
degreeandisnowinthefirstyearofaresearchdegree.Heistheonlychildinthefamily.
Planner
Cheryl
FocusGroup4
Planner
35
21yearsold.3rd-yearundergraduatePhilosophystudent,fromLondon,youngestoffive.
Concernedaboutcaringforherparentswhoareapproachingretirementandnotingood
health.Shefeelsshehasbeensupportedbyherparentsandoldersiblingsandnowit’sher
turntolookafterthem.
YoungAdults’FinancialCapability
Mandy
FocusGroup4
23yearsold.4th-yearfull-timeEconomicsundergraduatestudent,originallyfromHungary.
LivesinrentedaccommodationwithherScottishboyfriend.
Planner
Olwyn
FocusGroup5
Planner
Vicky
FocusGroup5
Dreamer
Lara
FocusGroup5
Dreamer
36
21,nurserynurse.Leftschoolat18andwenttocollegetotrainasanurserynurse,gaining
workexperienceandhasjustofficiallyqualified.Shelivesathomewithherparentsandworks
closebysoisabletosavemoney–hopingtobuyahouseonedaytoliveinandrentouta
roomtofriend.
20,nurserynurse,singleandlivesathomewithparentswithnoplanstoleaveinthenear
future.Shestrugglestobalancelowincomewithcostsoftravellingtowork.Savingupforher
21stbirthdaytogotoLasVegasandCalifornia.
21,livesathomebutdidleavehomeat18andrentwithherthenboyfriend,returningayear
ago.Shefindsitdifficulttolivebacktherealthoughitisfinanciallyeasier–shedoesnotknow
howsheaffordedtolive‘out’.Sheleftschoolat16andwasahairdresserbutchangedcareer
ayearagoandlovesnurserynursing.Shehasherowncarbutmoneydoesnotstretchfurther
thanthat.
YoungAdults’FinancialCapability
Financialcapabilityqualitativequestions:aide-mémoireforfocusgroups
INTRODUCTION
n
Askeachparticipanttointroducethemselvesbyname,ageandbriefbackground,family,worketc,ambitions
Warmupquestions:
n
Howdoesmoneymakeyoufeel?
n
Isitimportanttoyou?Doesitinterestyou?
n
Howwellinformedareyouaboutfinance/moneymattersingeneral?
n
n
Wherehasthiscomefrom?
Whatisyourpreviousexperienceoffinancialservices?
n
Explorewhichfinancialservicestheyhaveused
CONFIDENCE
n
How‘good’areyouwithmoney?–ifnot,whynot,ifsohow?
n
Doyoufeelconfidentwithmoney?Managingyourmoney?
n
Howconfidentareyouinmakingfinancialdecisions?
n
Whatarethethingsthatinfluenceyourfeelingofconfidence?
n
n
whatmakesyoufeelconfident?
n
whatmakesyoufeellessconfident?
Haveyouexperiencedachangeinconfidence?
n
becomingmoreconfidentorlessconfident?
n
whatdoyouattributethisto?
n
Arethereanyexternalfactorsthathaveabearingonhowconfidentyoufeelwithmoney/makingfinancial
decisions?Suchastheeconomy,jobmarket,education,politicalsituationetc.
n
Doyoufeelmoreconfidentinsomefinancialsituations/withsomefinancialproductsthanothers?why?
n
Howdoyoufeelyourconfidencecomparestoothers?
n
Peopleofthesameageindifferentsituations?
n
Peopleofolderages?Ifso,how?
n
Whatwouldmakeyoufeelmoreconfidentinmakingfinancialdecisions?Istheresomethingthatyoucoulddo,or
thatcanbedoneforyou?
n
Whodoyouthinkisconfidentwithmoney/financialdecisions?
n
canyoudescribethesepeople?
n
whatmakesthemconfident?
37
YoungAdults’FinancialCapability
SEEKINGINFORMATIONANDADVICE/BARRIERSTOENGAGEMENT
n
Whodoyoutalktoaboutyourmoney,financialdecisionmaking?Whythem,whynotothers–whatwould
triggerchange?
n
Arethereanyrolemodelsyoulistento/wouldlistentoaboutfinancialmatters?Whoseadvicewouldyoulisten
to?
n
n
n
n
n
Peer/near-peerideaspossiblymentionthemhere?
Wherewouldyougoorwhowouldyoutalktoifyouwantedinformationonanyfinancialproductsor
financialdecisions?
n
Whodoyoutalktoaboutfinanceswithanyone?Family?Friends?Banksetc?
n
Wherewouldyougotoaskquestionsandwhy?Anyexamples?
Whatsourcesofadviceandinformationdoyouuse/haveyouused?
n
namethem?Examples?
n
whathavetheybeenusedfor?
Andnotused–whatarethebarrierstotakingupsupport/advice?
n
whatisitisthatpreventsyoufrommakinguseoffinancialadvice/support?
n
(dothosewhotakeupthesupportlookdifferenttothosethatdon’tbutpotentiallyneedto?)
Whodoyoufeeltheadviceisfor?forwhatpurpose?
n
whattypesofpeopleusefinancialadvice?
n
Wherewouldyougoforadviceifyouneededtobuyahouse?orsaveup?orwereexperiencing
debt/moneyproblems?
n
Towhatextentdoyoufeelusingfinancialadvicecanhelpyoumakeeffectivefinancialdecisions?
n
Isthereanythingthatcouldbedonetomakefinancialadviceeasiertouse
n
n
ormorerelevantforyou?
Whatquestionswouldyouaskafinancialexpertnow–ifonewashere?
PLANNINGFORFUTURE
n
Whatdoesthefuturemeantoyou?Howlongfromnow?
n
Whatareyourgoalsforthefuture?
n
Towhatextentareyouactivelyplanningtowardsthosegoals?
n
Towhatextenthaveyousetyourselffinancialgoalsforyourplans/forthefuture?
n
n
Howfarintothefuturedoyoulook?plan?
n
n
whatareyouplanningfor?
Ifnotplanningmuch,atwhatpointdoyouthinkyouwillstarttoplanmore?
n
n
Howisthisorganized?
underwhatcircumstancesisplanningmorelikelytohappen?
Whatwouldencourageyoutoplanmoreforthefuture?
n
38
whatwouldhelpyoutobemoreorganizedinsettingfinancialplansforthefuture.
YoungAdults’FinancialCapability
n
Whatwouldmakeyoutakenoticeoffinancialservices,planning,moneymore?
n
Howimportantdoyouthinkitistoplanforyourfuturefinancially?
n
Doyoufinditinteresting?relevant?important?why?whynot?
n
Howimportantisfinancialadviceinplanningforthefuture?
n
Doyoufeelinanywayexcluded,isolatedorseparatefromfinancialservices?Howdoesthatmakeyoufeel?How
couldthisbechanged?
n
Whatimpactdoestheexternalenvironmenthaveonyouandyourfinancialsituation?Governmentpolicyetc?
Whatareyouawareof?–policychangesandhowthesewillimpactonyouintothefuture?
n
senseofincreasingresponsibility?
FINANCIALDECISIONMAKING:Attitudesandtransitions
n
Exploringanydifferencesinattitudesandfinancialdecisionmakingacrosssituations.
n
Thinkingaboutwhatwe’vebeentalkingaboutinrelationtoconfidenceandplanningandmanagingmoney,have
youexperiencedanychanges:
n
comparinglivinginthefamilyhomevslivingawayfromhome
n
goingtouniversity/startingwork/leavinghome/lostyourjobetc–ietimesoftransition?
n
betweenbeingineducationversusworking
n
Haveyouexperiencedanychangeasaresultofhavingyourownindependentsourcesofincome(comparedwith
beingdependentonparents?)
n
Orhavingdependentstolookafter?
n
Towhatextentdoyoufeelfinanciallydependentorindependent?
n
whatcontributestothis?
ANDFINALLY
n
Whatdoyouthinkisthemostimportantaspectoffinances?
n
Doyouworryaboutyourfinances?Future?Ifso,whatscaresyou?
39
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