Younger people better at budgeting than older generation

Younger people have a better idea of their day-to-day finances than those over 55, according to new research.

SunLife’s annual Cash Happy report suggests that a growing number of younger people are actively budgeting, with 60 per cent of 18 to 24-year-olds keeping close track of their incomings and outgoings.

That’s three times more than people over 55. Fewer than one in five over-55s admitted to having no or little idea of their daily finances (18 per cent) and those between 45 and 54 were even more oblivious (21 per cent). Meanwhile, fewer than one in seven (14 per cent) were clueless on their current finances.

Of the 3,000 UK households quizzed as part of SunLife’s research, more than half said they still don’t formally budget, despite evidence suggesting that having a tight grasp on our finances makes us happy.

In contrast, 47 per cent of us do, which is up from the 45 per cent in last year’s report.

Meanwhile, the proportion of people that have little to no idea on the state of our finances has dropped from 21 per cent to 17 per cent.

Debt and deposits

Location has a big say on how well we manage our finances, with more than half of Londoners (56 per cent) formally budgeting, which is the highest proportion in Britain and nine per cent more than the UK average.

At the other end of the scale, Scots were deemed least likely with only 40 per cent saying they actively budget.

SunLife’s head of brand Ian Atkinson said it was really encouraging to see more Brits budgeting, especially younger people who haven’t always been known for having a healthy approach to finances.

Mr Atkinson suggested that this keen attitude could be the result of increased university tuition fees or would-be first-time buyers trying to scrape together a decent deposit.

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“This is a generation that has seen a great deal of financial uncertainty in their adult lives, so it is no real wonder they are keeping close tabs on their spending,” he commented.

The cap on tuition fees is set to rise again in 2017 from £9,000 to £9,250 a year, while the average deposit for a house in the UK is believed to be £33,000.

Mr Atkinson added that following June’s Brexit vote, the financial futures of young Brits are even more uncertain.