16 December 2015

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European Youth Expect Tough Economic Future

  • Nearly a third (29%) of young people in Europe feel their finances are in a poor condition 
  • Two thirds (66%) of people in Europe feel young people have to make more financial decisions than the older generations did when they were young  
  • Some 75% of people across Europe agree it is more important for young people today to learn how to manage money
Almost one in three (29%) young people across Europe are barely in control of their finances*.
A new international study of financial behaviour questioning about 15,000 people across 15 nations reveals there is widespread concern about the financial prospects of the younger generation.

The research from ING Group found that three quarters (76%) of people in Europe feel young people face a more uncertain future than the older generation did when they were young.
Lower incomes combined with slow growth since the global financial crisis are likely to be a reason why young people in ItalyPoland and Turkey are least confident about their finances (Table 1).
Two-thirds (66%) of the people surveyed feel young people in Europe have to make more financial decisions than the older generation faced in their younger years, implying that young people have never had it so tough financially.
As a result, three-quarters (75%) of Europeans agree it is more important for young people today to learn how to manage money, with people in Italy (82%) and people in the UK (79%) taking the lead. In some countries, public opinion has affected policy, with financial education now being taught in schools in the UK, for example**.
Nor is the downbeat assessment of the economic future confined to Europe, with large numbers of people in the USA (72%) and Australia (65%), the two other developed nations covered in the study, also concerned about young people's financial prospects.
In this respect, ING is working on a programme, the Think Forward Initiative, which aims to gain a deeper understanding of personal finance decision-making and use those insights to help people make decisions that are better for them, and ultimately better for society. A full copy of this report, which is part of a series, can be downloaded here.
ING Senior Economist, Ian Bright commented: "The condition of people's personal finances can have a profound impact on everyday life, no matter what age you are. However, many feel that young people in Europe are facing tougher financial challenges today than their grandparents or parents ever faced. 
In particular, government support and social security are under review in many countries and younger people often have less support than they did in the past. In addition, the financial crisis has accelerated the shift towards individuals taking more responsibility for their financial affairs. This is why research into financial education across Europe could help ensure the next generation is financially literate."
Table 1: Young adults who say their finances are barely or not at all in a good condition  
  
                       Percentage % of
                     young adults (18-24
                      years old) who say
                      their finances are
                     barely or not at all
        Country      in a good condition
    Austria                   12
    Belgium                   15
    Czech                     13
    France                    28
    Germany                   14
    Italy                     48
    Luxembourg                14
    Netherlands               12
    Poland                    39
    Romania                   29
    Spain                     30
    Turkey                    37
    UK                        19
    Australia                 21
    USA                       20
    Average European
    consumer                  29
*Please note the age breakdown for 18-24 year olds are not included the report, but can be provided separately
**House of Commons UK Library, Financial Enterprise Education in Schools, 9 December 2014 file:///Users/user/Downloads/SN06156%20(1).pdf [accessed 14.12.15]
SOURCE ING Group