1. Context
2. The study
3. Key findings
4. Points to consider

Context

As young adults leave school, college or university and enter the workforce, they can face many changes and challenges. In particular, making financial decisions – such as accessing credit or saving for a house deposit – is important for improving financial resilience and capability. However, getting young adults to access and act on guidance and advice that helps financial decision-making continues to be a challenge, and more evidence is needed to understand how young adults engage with their finances, in order to understand how best to help them.

The study

In 2017, the Money Advice Service commissioned BritainThinks to conduct research with young adults aged 16 to 25 and living in the UK. The research aimed to understand how young adults think about their money in the context of their lives, what strategies they use to manage their money, and what they would like to know to be able to manage their money better.

BritainThinks used a mixed-method approach to address this research aim. They held four qualitative workshops across two locations (London and Manchester), with a group of school leavers or university leavers in each location. Alongside the workshops, BritainThinks conducted an online quantitative survey of 470 young adults aged 16 to 25 to understand their attitudes and behaviours around managing their money.

Key findings

The report presents findings in relation to the following themes:

• • Young adults thought that managing money was important, but not as important as having social relationships.
  • Young adults view money management as a part of growing up, which is both exciting and daunting. Over a fifth of young adults (22%) were not confident with managing their money.
  • Young adults often perceived that talking about money with friends or family was ‘taboo’. Nearly a fifth of respondents (19%) said they would feel embarrassed talking to friends or family about it. Many young adults also spoke of feeling social pressures around money, for example feeling the need to spend money to keep up with certain images on social media.
• :
• Most young people reported managing their money, for example by budgeting or in short-term savings, but often this was ad hoc and short-term.
  • Nearly three quarters of young adults (72%) agreed that self-control was more important than knowledge in relation to managing money.
  • Many young adults highlighted using ‘barriers’ between them and their money – for example by using a savings account that has a notice period for withdrawals.
  • Two-fifths of young adults do not usually seek guidance when making financial decisions.
  • Young adults thought that living within their financial means was a key element of effective money management. They recognised being organised and planning their spending as important aspects of managing money well but felt that this often inhibits their social life.
• • Young adults found the concept of money ‘tips’ appealing and understandable.
  • Around half of workshop participants could not recall receiving tips or guidance about managing their money.
  • 85% of young adults wished they had been taught more about money management while at school or university, particularly in relation to credit, investments and budgeting.

Points to consider

• Although the quantitative research is representative of all young people in the UK, BritainThinks only conducted the qualitative research in two locations in England. The study may have benefitted from capturing the experiences of young people living in other parts of the UK.
• The report is relevant to all those interested in how to reach and influence the financial capability of young adults at key transition points in their lives.
• The survey findings are generalisable to all young adults aged 16 to 25 in the UK; BritainThinks weighted the data by age, gender and region to ensure it was representative off all young adults in the UK.

Full report

Young adults and money management - full report