Against the backdrop of an evolving financial landscape, research conducted by organisations like Citizens Advice illustrates the pressing need for comprehensive financial education. These studies showcase the soaring debt levels and financial challenges faced by young people, amplifying the urgency for educational reforms that would include a structured national financial literacy programme.
Citizens Advice studies reveal that 15-24 year olds carry unsecured average debts of £12,215, the highest among any age group. Particularly alarming is the staggering 206% increase in the debt of this age group since 2012. This trend, coupled with the 70% debt to income ratio of young people aged 15-24, underscores the imperative of early intervention financial literacy.
Moreover, a 2021 Citizens Advice report indicates that 45% of young British people have utilised Buy Now Pay Later (BNPL) services, with half doing so without full understanding of the terms and a third eventually regretting their decision. 4 in 10 have struggled to repay, further emphasising the critical need for consistent financial education.
A 2014 study conducted by the Centre for Social Justice Change considered the interaction between students and predatory lending practices. They found that students are regularly accumulating debts on credit cards and bank loans, with one third running up arrears on debt repayments. Notably, a majority of students who took out short-term high-interest loans reported that as a result of their indebtedness they have experienced heightened anxiety and difficulty in concentrating on their studies.
The relevance of financial education in addressing these challenges cannot be overstated. The research data underscores the financial vulnerabilities of young individuals, emphasizing the urgent need for comprehensive education programs.
In a broader societal context, these financial challenges can have long-term consequences, affecting individuals’ mental well-being, academic performance, and overall quality of life. It’s not merely about acquiring financial knowledge but preparing individuals to make informed and responsible financial decisions, setting the stage for a more secure and prosperous future.
