Britain’s young people have lost the savings habit according to a new report which shows that more than half of them have no savings at all.
The report into the financial circumstances of 22 to 29 year olds by the Office For National Statistics (ONS) shows that 53% have nothing set aside for a rainy day – a 12% increase over the last decade.
The detail of the report shows that, of those who have managed to tuck something away, nearly four in ten have saved less than £1,000, but average savings for the group is around £1,600.
A savings gap has emerged with the top 10% having £15,000 or more set aside compared to the bottom 10% who had less than £100.
The squeeze on pay, the prevalence of insecure work and the pace of modern day living are all seen as factors making it difficult for many to set money aside.
More than a third – 37% – are in debt, down from 49% ten years ago, but the average level of debt has risen from £1,800 to £1,900.
The number of homeowners in their twenties has fallen by 10% to 27% with experts saying the main reason for this is that twenty-somethings don’t have enough money to save for a deposit.
The cost of living means more people are remaining at home or renting from private landlords.
Tax and financial planning expert Rachael Griffin said: “Add this to a long period of steadily increasing house prices and you can see how difficult it is for young people to get a foot on the housing ladder.
“Boosting the savings culture in the UK is of paramount importance. Younger generations need to have it instilled in them that having a healthy savings account is essential.
“Research shows that, like many behaviours, our attitudes to money are shaped at a young age. The Money Advice Service has shown that many key financial habits are set by the age of 7.
Therefore it’s incredibly important that the government gives thorough consideration to the introduction of financial education onto the primary school curriculum.
“Doing so will help tackle financial illiteracy and show children early on the merits of saving, and hopefully avoid a situation where we find in another 10 years a generation of 18-29 year olds with even less in their savings accounts.”
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