Research on the UK’s attitude towards finance shows that many are reserved when it comes to their finances. Pay.UK has found that 55 per cent of 18-24 year olds do not feel confident about managing their money. This could be one reason Gatehouse Bank has found 34 per cent of UK adults now view themselves as savers or spenders.
As more Gen Z are leaving the educational system, many are starting to realise they do not have sufficient knowledge surrounding financial services. Pay.UK, owner and operator of the Current Account Switch Service, has revealed that 75 per cent of Gen Z (18-24 year olds) wish they had better financial education at school.
A mixture of a tough economic climate, with the cost of living crisis playing a huge role, and a lack of financial experience have resulted in 90 per cent of Pay.UK’s respondents admitting they are speaking to someone to help with their financial situation. The majority (59 per cent) speak to family, while 15 per cent speak to friends and 11 per cent to a financial advisor or bank.
Luckily, over three-quarters (78 per cent) of the survey’s 2,000 respondents said they felt supported by their banking provider. However, when asked what their banking provider could do to support them more, 35 per cent felt they would benefit from free financial support. Furthermore, 32 per cent said they needed better budgeting tools.
“It’s reassuring to see that a large majority of this generation feel supported by their banking provider. As young people continue to navigate an increasingly challenging financial environment, they can rest assured that if they find a bank that better suits their needs, the Current Account Switch Service is on hand to facilitate a quick, easy and guaranteed transition to their new account,” said John Dentry, product owner at Pay.UK.
Changing banking habits
The research also reveals disparities in financial literacy when it comes to banking. Thirty-one per cent stated they do not know what a current account is. In fact, only 35 per cent of Gen Zs have actually switched to a current account.
Speaking to this, Dentry adds: “The number of 18-24-year-olds who do not know what a current account is surprisingly high and highlights the need for better financial education for Gen Z, not only for current accounts, but banking habits more generally.”
Surviving inflation and the cost of living crisis
Fifty per cent of Pay.UK’s respondents said they are worried about the cost of living crisis. A further quarter (26 per cent) are worried about the cost of buying a house and 23 per cent about the cost of renting.
Just over a quarter (27 per cent) said they do not have any debt, while 27 per cent said they were using their overdraft to pay for necessities. One in five are using BNPL when they are waiting for payday. Meanwhile, 12 per cent use BNPL for physical food shops and 10 per cent for takeaways.
Young people aren’t the only ones suffering in this climate though. According to new research from Gatehouse Bank, the Shariah-compliant challenger bank, 11 per cent of UK adults have shifted their financial habits in the last year to try and save more.
More and more people are turning to saving as a means to survive. In fact, 44 per cent of savers stated that they viewed saving as an essential outgoing of equivalent importance to their home finance or rent payments.
A blessing in disguise?
The cost-of-living crisis cannot be described as a blessing. However, it has made many more conscious of their funds. Over half (59 per cent) of Gatehouse Bank’s respondents are aiming to save more on a monthly basis.
Ravi Kumar, senior product manager at Gatehouse Bank, comments: “The research shows a promising rise in the number of UK adults who class themselves as savers, demonstrating that people are actively shifting their mindset, which is really positive.
“In the current high-rate environment, it’s important to continue setting savings goals and putting away some money every month. Even a small amount will ultimately add up and doing so is also important for creating a healthy savings habit.”
Francis Bignell
