Young, sad and living off dad

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Young people face a triple challenge that undermines their ability to reach their financial goals. Burdened with debt, low wages and a high cost of living (especially in London) the young struggle to save for a down payment to rent or buy their own place.

The Money Charity produced data focusing on young people in its November 2019 Money Statistics. There are 5.5m people between the ages of 18 and 24. Of that number, 1.9m are in full-time education and 3.4m are employed full time. There are 5.5m people between the ages of 18 and 24. Of that, 1.9m are in full-time education and 3.4m are employed full time.

The Debt Crisis

Students starting university in 2018-19 in England will take on an annual maintenance and tuition loan of £14,463. Scotland has the second highest costs at £13,800. In Wales, it drops to £10,226 and in Northern Ireland, it is £8,335.

Low Wages

Wages are legally lower for those under 25 than those over. Minimum wage for under 18s is £4.35 an hour, dropping to £3.90 for apprentices, with their median weekly pay coming to £201.20. That pay packet rises for 18 to 21-year-olds to £350, and to £494.60 for 22 to 29-year-olds. In comparison, the median pay for employees of all ages is £585.

Gender difference is also reflected in youth pay, with young women aged 18 to 21 paid £14 less per week, and 22 to 29-year-olds earning £32 less a week.

Cost of Living

The median monthly rent in England, assuming that it is a single room in a multiple occupancy with shared usage of common facilities, is £390. In London, it’s £600. In 2019, first-time house-buyers paid an average price of £197,433 with a deposit of £51,000. Under these circumstances, it is difficult for young people to save for their first down payment.

According to Erik Porter, Acting Chief Executive of The Money Charity, ‘It’s hard to see how we are giving young people the chance to achieve their financial goals.’ Since achieving financial goals are part and parcel of attaining other goals, it is possible that achievement overall is affected.

According to the right-leaning thinktank, Civitas, as a result of these financial pressures, 3.4m 20 to 34-year-olds are still living at home, creating a population of young people who are young, sad and living off Dad.

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Photo by Christopher Harris on Unsplash