Time to get serious: Young people plan to save, not spend in 2015
When it comes to setting financial goals for 2015, it is those aged 18 to 24 who are most likely to prioritise getting in control of their money. This age group, more than all other age groups, plan to get in control of their finances by reducing spending on leisure, according to research from pensions and insurance provider Friends Life.
Almost a third of all 18-24-year-olds (32%) plan to curb the amount of money they spend on leisure activities, compared to a UK average of 18%. In addition, more than a third (35%) of 18-24 year-olds said they wanted to increase their savings with top aims being to buy a car (17%) or house (20%).
The findings illustrate that younger people are maximising their potential to save, which could be attributed to the positive impact of auto-enrolment. Research from Friends Life earlier this year revealed how important it is to actively contribute to retirement savings from a young age. An analysis of ONS data found workers on average face a salary drop of £400 per year once they turn 50. As a third (35%) of those over 55 are prioritising spending their money on a holiday next year, this age group need to ensure they are considering what money they are putting aside for the long-term.
Andy Curran, Chief Executive Officer, UK at Friends Life said: “As our thoughts turn to 2015, it is really interesting to understand what people’s financial priorities are. The positive news is that many feel confident about their financial situation and are already taking steps to ensure they plan ahead and save for both the short and long term. This is particularly evident among those aged under 25 who are just entering the workplace and appear to have a healthy approach to saving. This is a crucial shift in savings behaviour as our recent Retirement Savings Map found currently many people face a £96.67 per week financial shortfall in retirement. This demonstrates why it is so important for people to take control of their finances sooner rather than later.”
When it comes to what people want to do with their money in the short term, 44% of the population said it was to stay in control of daily spending and sticking to a monthly budget was most important. A third (29%) said their top priority was to take a holiday while one in five (18%) said they wanted to pay off credit card debt. The good news is that overall people are positive about their ability to achieve their financial goals in 2015, with two in five (38%) confident they will achieve their long and short term priorities, and half (47%) saying they will be in a comfortable financial position.
To find out more about setting a financial goal and saving for the long term, visit friendslife.co.uk.