- Over three quarters (78 per cent) of those under 35 who have learned from the advice or anecdotes shared by older people, say older people in their lives have helped shape their own savings habits.
- Two thirds (69 per cent) of UK adults agree that it would have been useful to have had a better understanding of money matters at a younger age.
- Three quarters (76 per cent) of millennials say they are open to discussing and taking on board savings advice from those with more experience than them.
- Four in five (83 per cent) adults who agree that it would have been useful to have had a better understanding of money matters at a younger age, believe that younger people would be better prepared to tackle future financial challenges if money management was taught at a younger age.
LONDON, Wednesday 24 March 2021: As we look back on the past year and reflect on the lessons learned, new research from online-only savings provider, Ford Money, reveals the importance of financial knowledge transfer between generations. Over three quarters (78 per cent) of 18-34 year olds who have learned from the advice or anecdotes shared by older people, say that older relatives and members of their community have shaped their savings and financial habits.
In fact, younger adults are keen to learn from those with more experience than them as three quarters of under 35s (75 per cent) say they are open to, and want to take on board, savings advice. However, almost half (47 per cent) of over 45s admitted that they haven’t shared savings tips with younger members of their families or communities as they don’t believe it’s their place to.
Suzanne Lewsley, chief deposits officer at Ford Money, said, “For many of us, talking about money and savings can still feel awkward and uncomfortable, even when it’s with those closest to us. But as our research reveals, sharing stories, advice and experiences can make these discussions easier and will be more valuable in the long run.
“The events of the past year have taught us that being prepared for unexpected events is crucial. Discussing money matters with one another is the first step in feeling prepared and transferring financial knowledge is vital to providing people with a better understanding of how to make their hard-earned money work for them. From this research we can see more open conversations need to take place between generations, to build better financial knowledge that everyone can benefit from in the future. ”
The importance of financial education
Over two thirds (69 per cent) of respondents agree that “it would have been useful to have had a better understanding of money matters at a younger age”. Such insights indicate the value many place on having the necessary financial knowledge to wield later in life. Of this group, four in five (83 per cent) believe that younger people would be better prepared to tackle future financial challenges if personal finance management had been an established part of their school curriculums.
When unable to find the information needed, many young people are keeping it in the family. When asked who they gathered the most financial knowledge from, over two thirds stated that their parents played a key role in their financial education (68 per cent), followed by grandparents (23 per cent) and siblings (16 per cent).
The Covid effect
Despite the difficulties of the past year, just under half of respondents (45 per cent) stated that they are confident about their financial future in 2021. Planning and preparation has become essential, as a third (32 per cent) of under 35s say the biggest lesson they learnt in 2020 was to save more in case of unexpected events.
Suzanne Lewsley adds, “Despite a challenging year, our research found that over a quarter (28 per cent) of UK savers have not been deterred from looking to the future and are still putting aside money for a rainy day.”
When asked to share one piece of advice with the next generation of savers, the top three pieces of advice relayed by older savers aged 45 and over were:
- “Start saving as soon as possible, no matter how much, to best prepare for the future and any unexpected events.”
- “Be wary of relying on credit cards and borrowing – instead set yourself savings goals.”
- Keep a close eye on your finances and try budgeting to find a system that works for you.”
Kara Gammell, financial journalist and founder of moneysaving blog yourbestfriendsguidetocash.co.uk, commented: “As adults, we like to think that when it comes to teaching our young people about safety and good manners, we have got it under control.
“Yet when it comes to educating them about money, few of us know where to start. As Ford Money’s research indicates, parents have the biggest influence on their children’s financial habits, therefore it’s crucial that we teach them that money plays a variety of roles in life, whether it’s spending today or saving for tomorrow.
“Government-backed Money Advice Service found that future financial attitudes are set by the age of seven. So, even before children enter junior school, whether they will be ‘savvy spenders’ or ‘splashing-the-cash types’ as adults has already been determined. Teaching our little ones how to be good with money is a lesson that will last a lifetime.”