More than half of twenty-somethings have no savings at all, official figures reveal

The proportion of homeowners in their twenties has dropped from 37 per cent to 27 per cent, which experts say is no surprised based on lower savings rates and higher property prices

Caitlin Morrison
Friday 05 October 2018 08:33
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Universal Credit leading to "unprecedented" levels of debt and people "stealing" to survive

More than half of people in their twenties have no savings, according to the latest figures from the Office for National Statistics, but data also shows that young people are now less likely to be in financial debt.

The ONS numbers revealed that 53 per cent of 22-29-year-olds had no money saved in a savings account or an ISA in 2014 to 2016, compared to 41 per cent in 2008 to 2010.

For those who do have money set aside, the average amount saved has gone up to £1,600, from £900.

Around 37 per cent had financial debt down from 49 per cent in 2008 to 2010, however, the debt had increased to £1,900 from £1,800. The ONS did not include student loans in its debt calculations.

The ONS reported that the highest earning 10 per cent of 22-29-year-olds were paid at least 4.3 times as much per week as the lowest earners last year.

This gap widens when it comes to savings, with the top 10 per cent of savers having at least £15,000 set aside, while the bottom 10 per cent had saved less than £100.

In terms of debts, the 10 per cent of 22-29-year-olds most indebted owed at least £14,200 in 2014 to 2016, compared with £100 or less owed by the 10 per cent least indebted.

Meanwhile, the proportion of homeowners in their 20s fell by 10 percentage points between 2008 and 2017, from 37 per cent to 27 per cent.

Rachael Griffin, tax and financial planning expert at wealth management firm Quilter, said the falling rate of homeownership among young people was “really no surprise, as if savings have also dwindled people simply don’t have enough money for a deposit”.

“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, even if they are eating avocado on toast for breakfast,” she said.

Ms Griffin added that the latest numbers from the ONS showed the need for more financial education in UK schools.

“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,” she said.

“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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