Live within your means and don’t get into debt, start planning for your future early and make saving for your retirement a priority.
That’s the advice from the over-50s to Britain’s twenty-somethings according to a new survey by Skandia, but the advice doesn’t always get through to young people struggling with different financial priorities.
The investment specialists asked 500 professionals in their 50s what advice they would give to younger people when it came to looking after their money.
And while an overwhelming majority (94%) urged the younger generation to do their utmost to avoid getting into debt, only seven out of ten twenty-somethings said they were prepared to take the advice on board.
And despite 71% of those aged 50-plus urging the younger generation to make saving for retirement a priority, only 30% of twenty-somethings said they planned to start putting money away for when they stop working.
Retirement is the last thing on the mind of customer services assistant Natalie Hallows, 24, from Manchester, who said: “I don’t believe we currently live in a society that encourages young people to save money. Worrying about my retirement is not something that concerns me at this moment in my life.
“Like many of my peers, I am more concerned with achieving more relevant milestones such as progressing in my career, paying off my student loan and getting onto the property ladder.”
However, according to Skandia’s Growing Pains report, published earlier this year, which surveyed over 1,000 (1,076) people aged 18 to 30, almost half (44%) are performing financially much worse than expected.
All reported some level of debt but over a third of them (35%) have debts of £5,000 or above and less than a quarter (23%) have some form of pension.
And Julie Kirkham, a Burnley-based 50-something who works for Greater Manchester Police, said not enough young people were thinking about the challenges in their financial future.
“We definitely don’t live in a culture which promotes saving,” she said. “I think they would be wise to invest and save their money.
“But I would tell them to shop around first, do some homework before making any investment in pensions to make sure they get the best out of their investment. I understand why they might not see it as a priority, but as the years go by and cost of living rises I feel my pension shrinks so they should heed the advice.
“I think for young people it is almost unavoidable to avoid getting into debt as they start their careers, cost of living is rising all the time.”
Graham Bentley, Skandia’s head of investment strategy, added: “Clearly there is a mismatch between what young people believe they will achieve and what they are actually doing to ensure they will have enough funds to support a comfortable retirement.”