Young people want financial products and services that help them meet their personal goals.
To try to better understand our young people’s financial wellbeing, we asked core questions about their financial health. We wanted to see where help from formal providers could come in. So, how can financial service providers support young people’s financial health?
A good financial service will help me meet my personal goals in the sense that I would be able to go back to school, and it will help me boost my business, which will be supporting my family and people around me, or other people that look up to me.
Financial service providers can work with young people to identify their individual goals and help them to achieve these goals. When asked if they had ever received advice on managing their money, 68% of young people said that they had “often” or “once or twice.” However, for the most part, in our survey, the information on products and services young people receive comes from family and friends instead of the formal financial system, although some noted that they had received some form of financial training.
It is unsurprising, then, that the vast majority (83%) of banked young people turn to family members first when finances are strained. Only 9% turn to a bank when they need financial and non-financial support. This is just above the 8% that would turn to an informal money lender first (see Graph 9 in the following section: Who do young people turn to?). One young woman highlights the theme in our numbers that young people want to be equipped with skills and ability, not be marketed products and services:
Be open to us, the individuals, and coach us through the essential financial services we need in our lives. Don't just focus on selling your products to us, but be concerned about our financial goals and assist us where necessary to achieve them. Be open to teaching and sharing with us the skills and knowledge.
In efforts to really start to understand the young people living, working, and surviving, we asked some questions in 21 Standard Chartered markets about their financial health, based on standard measures.53
We asked young people about their financial elasticity and the extent financial circumstances impact their lives, as well as how confident and well informed they felt they were.
Young people live on tight budgets. Among the young people surveyed, 35% say they “rarely” to “never” had money left over at the end of the month, and a further 35% said they “sometimes” had money at the end of the month (see Graph 6: To what extent are young people's finances strained in our survey?). For 30%, an unexpected gift would “always” to “often” put strain on their finances, and for a further 40%, it would “sometimes” put a strain on their finances.
A third of young people (33%) said that their difficult financial circumstances “always” or “often” control their life. An additional third said that it “sometimes” controls their life, while the remaining third said that it “rarely” to “never” controls their life.
Nonetheless, the young people surveyed tend not to be in debt regularly. More than half (55%) said they “rarely” to “never” owe people money. Of the young people surveyed, 17% said they “always” or “often” owe other people money (usually family or friends). Graph 7 shows how indebted young people are in our survey. This can place a strain on relationships and be a cause of worry for young people. This compares to 63% of adults in the UK that had personal debt in 201954 and 80% of Americans who live in debt.54
UNSGSA suggests there are certain products and services that can help improve financial health. Savings services, appropriate payment products (cheap and effective), the right type of credit (long-term and purpose-driven rather than used to manage day-to-day expenses), and insurance all support a person’s financial health.56 Savings are essential to putting young people on the path to meeting their long-term goals, which we detail in Section 1: What do young people want? Service providers can also help young people manage their money and develop healthy financial behaviours. They can do this through providing built-in tools, such as money-pots and goal-setting, as well as skills, ability, and understanding through engaging tools delivered at the right time, as we explore in the next section.
[Financial services providers can help me in] being disciplined on how I spend and save money for future use and set goals for the money in order for me not to misuse the funds
Financial service providers can help young people improve their financial health and prepare for future shocks. They can provide products and services that put them on the path to achieving their goals. Financial service providers can also, as we explore in more detail in the final sections, help provide knowledge and information so that young people can make informed decisions about their financial future and their present course of action.
