The data shows that the under 60s are much more likely to report feeling an impact on their household finances. People aged 16-29 were significantly more likely to report an impact on their finances (30%) than those aged 60+ (13%). Among young people with financial worries, a loss of income (84%) and being unable to save (38%) were the most common problems.
“Almost one in three young adults reported a financial hit due to Covid-19. Many young people will be really worried about their career prospects. If they’re just entering the workforce then it is obviously a difficult environment to be looking for your first job. And for those already in work, they have less experience on the CV to give them confidence that they will be able to find a new position if they are made redundant. That means that many of them are particularly worried about the risk of a loss of income.
“It is also likely they will have fewer financial resources to fall back on if they face financial difficulties, whereas older age groups are more likely to have savings and assets they can rely on if they suffer a loss of income.
“This is borne out in research conducted by Quilter. Among over 75s, more than 70% of people said they felt financially prepared for Coronavirus crisis. But this figures falls to 42% among 18-30s. They key drivers that made people feel more financially secure were having adequate cash savings to fall back on, being debt free and having income from other sources, such as investments.
“It is a financially difficult time for many people, but especially for young adults. For obvious reasons, young people are less likely to have had an opportunity to build up substantial savings. And they may also have sizeable borrowings, such as a large mortgage if they’ve recently bought a home with a large loan-to-value ratio.
“The most important thing they can do to try and give themselves a sense of financial security at the moment is to ensure they have some cash savings set aside for a rainy day. Figures from the Money and Pension Service suggest that around 11 million people have less than £100 in savings. That isn’t going be enough if you experience a loss of income. As a consequence, people may find themselves borrowing to meet day to day costs, which is where problems arise. For those that are able to do so, building up some cash reserves provides an important financial buffer against a shock and will leave you feeling more secure and confident that a financial challenge won’t cause a ripple effect that leads you into further problems.”