From high school to high flier

The profile of the average teenager is changing – today’s younger generation is a financially ambitious group with almost a quarter (24%) 16-21 year olds in employment expecting to be earning over £40,000 in as little as 10 years time – this could be over double the national average wage of £23,244, according to research by Alliance & Leicester.

The earning ambitions of young people in employment mean financial goals are being mapped out early on, with 8 out of 10 (81%) expecting to own a property by the time they reach 30yrs, and nearly a third (32%) aiming to be debt free by the age of 35.

At the same time, current trends show that the average graduate will have racked up around £20,000 of debt – a huge amount that is likely to take many years to pay back. Of those who opted against the higher education route, over a quarter (26%) of young people in employment are already debt-free and so will be able to set their sights on a significant disposable income in the near future.

Managing the finances

Over four in ten (44%) of those who decided to go straight into work say they are more cautious with their money since starting employment.

A further four in ten (43%) say they have a more accurate picture of their current account balance and where their money is going since starting work.

Debt concerns

One in four (43%) say that debt that students accumulate at university is one of the main reasons they decided not to go to university.

University is not an option for a quarter (26%) of 16-21 year olds as they admit they can not afford to go.

However, over a quarter (26%) of young people in employment are debt free.

Helen Palmer, Current Accounts Manager at Alliance & Leicester said: “These days, young people have high financial and lifestyle aspirations and getting on the career ladder early can be the quickest way to achieve their goals for many. As a group they recognize the growing trends of graduate debt, and in contrast the potential advantages of going straight into employment– especially climbing the first rung of the property ladder and earning substantial amounts of money.

“It is important for this group to maximize the potential of their hard earned cash and this isn’t about clever investment choices or making timely and strategic financial decisions – it’s about basic management of money in a current account.

“The recent launch of our Premier 21 account – which is specifically tailored to this group - offers young people in employment the highest credit interest rate on the high street to help make their pay packets stretch further. And with such high hopes for their earning potential it is important that young people also learn the benefits of putting money aside for a rainy day and our linked PlusSaver account allows them to do just that.

“Many high street banks still tend to overlook the needs of young people other than the undergraduate group, so we are proud to have designed this highly competitive account with unrivalled rates and benefits to recognise the needs of this specific group.”

The Premier 21 Account offers the following:

A best–buy credit interest rate of 10% fixed for at least one year from account opening on balances of up to £1,000

Balances over £1,000 earn 0.10% gross

Guaranteed minimum overdraft of £250 subject to minimum age of 18yrs and credit scoring

£10 ATM buffer zone giving customers emergency access to the last few pounds in their account via an ATM, even if the balance is below £10 (and in credit).

Linked PlusSaver account with 4.80% AER interest rate (3.84% net)

Visa Debit card

Easy switching service

Free mobile phone top ups via Mobile Banking

Cheque book available on request