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Young People & their behaviours with regards to credit - Coggle Diagram
Young People & their behaviours with regards to credit
According to research by Money Advice Service Scotland 3 in 5 people in their late 20s made their biggest money regret aged 18-22 years
Why might this be?
New found independence coupled with a lack of maturity
Less focus on future planning - living in the now?
Lack of budgeting skills
Lack of understanding of financial products - Terms and conditions etc
Targeted marketing
Obssession with "good credit history"
Increase in other costs such as cost of rent, forcing students and young people to struggle and reach for credit
Average living costs in Scotland according to STS 2020 survey is £825 pcm
Highest SAAS = £645 pcm
How big is this problem really?
Previous MAS evidence indicated that 1.8 m people aged 18-24 were in financial difficulty due to debt 2016
What constitutes financial difficulty (Image National debtline borrowed years)
What can being in financial difficulty affect? (Image STS 2020 survey)
Of 3161 students surveyed by STS (the largest independent survey of its kind) 71% of them worried about making ends meet. Once drilled down to Coronavirus specific this rose to 81%
NUS produced a 2016 survey indicating that 60% of students left university with debt other than any student loans accrued
NUS surveyed 4000 students in response to Covid 19 and found: Debt of various forms has been accumulated by large numbers of students since the pandemic started. 18% reported using credit cards, 10% reported needing financial assistance from friends and 8% took out bank loans. Around a fifth of students have fallen into rent arrears with their landlord and a similar portion also fell behind on utility bill payments. With the eviction ban only delayed by a further month this could begin to have serious repercussions.
What things might younger people use credit for?
Clothing
Cars
Tech
Getting by and paying bills
Online gambling/bingo etc
NUS surveyed 1618 students and of those who gambled 49% did so to supplement their earnings
Make up, skin care. hair maintenance
What types of credit might we see?
Klarna
Paypal
Car finance, PCP, PHC
Credit cards
Store cards
Overdrafts
Bank loans
Personal or family loans
Catalouges or online credit accounts such as Very, Freemans, Jacamo etc.
How can we best support young people?
Open and honest converstations
Don't stereotype
Assist them to understand the ts and cs
Help to plan/budget, use hooks to make this appealing
Understand that in many cases the sums have forced them here
Challenge positively
Give them access to tools and support - check out our money advice pages