New study looks at how retirees and students deal with their finances

People in the UK naturally manage their finances in different ways and some generations have been found to be better at certain things than others.

New online research from Standard Life explored the ways individuals deal with their money and found some interesting differences in the behaviours of students and retirees, compared to workers.

For example, retirees are the most likely group to make sure they do not spend money that they have not got and avoid running up debt as a result.

On the other hand, less than half of all students (48 per cent) are focused on not spending funds they do not have, meaning quite a lot of them are racking up personal debt.

This is not entirely surprising considering they have to pay high fees to attend university and face rising accommodation and living expenses.

Students were also found to be most at risk of falling into credit card debt, while retirees were much more likely to pay it off each month, incurring minimum charges.

Worryingly, less than one in five student (18 per cent) pay off their credit cards each month. However, fewer people in this category have credit cards, particularly if they do not trust themselves with one. People anxious about their willpower with plastic are certainly best advised to stay clear of them until they improve their financial situation.

However, students are being savvy with any cards they do have, with ten per cent regularly moving their balance using credit card offers, while just one per cent of workers and three per cent of retirees are doing the same.

Workers are struggling a lot with paying off their bills in full at the end of the month and only 18 per cent are managing to do so.

The survey found retirees are also the most likely group to make the most of loyalty cards and regularly review their utility tariffs to ensure they are getting the best deal. This is imperative considering how much energy bills are costing in the current economic climate.

However, one area where students have the upper hand on retirees is budgeting. Full-time students are far more likely to set out their monthly expenditure than workers and those in retirement and are generally quite savvy with their income, buying many items second hand.

Some 33 per cent of students set a weekly or monthly budget for their spending, while 24 per cent of retirees do the same. Workers are most proficient in this area, with 36 per cent planning their financial future.

Julie Russell, financial expert at Standard Life, said: "Our research shows that retirees are the most determined not to run up debt … but students, who are young and perhaps still have lots to learn about managing money are doing really well too, particularly when it comes to budgeting.

"The important thing is that whether we are busy with work or not, we take time out to plan our finances so we can make our money go further," she added.

Budgeting can help improve finances drastically as it means people know exactly what is coming in and how much is going out. It is also important to make sure money is put aside to pay for any emergencies as it is easy to fall into debt should any arise.

By Amy White

Find out more about money management on the ClearDebt blog.