Uncovered: Where are young Brits getting their financial knowledge?
Read the findings of our detailed study into young people and finance
Money is an integral part of our lives. But are we learning about personal finance - how to borrow and take care of our money - too late?
A study1 discovered that 4 out of 5 students feel they aren’t taught enough practical money lessons in school. Some of the UK’s best personal finance teachers2 are also urging the government to extend mandatory financial education in secondary schools to both primary schools and sixth form colleges.
In response, MoneySuperMarket surveyed 2,000 young Brits (18-24) - in two separate survey questions of 1,000 - to uncover where they received their financial knowledge and, subsequently, how comfortable they feel applying for loans and speaking to their family or friends about borrowing.
Almost half (41%) of 18-24 year olds surveyed get their financial knowledge from their family and friends
However, 57% actually do their own research online without family and friends, and use social platforms such as TikTok, YouTube, Instagram and Twitter
According to our survey, TikTok is the most popular social platform for developing financial knowledge for young Brits
Nearly one fifth surveyed (18%) found it easier and felt more confident applying for a loan rather than approaching family and friends
41% of young Brits surveyed said their financial knowledge came from family and friends
Survey respondents were able to choose multiple answers to highlight where they had received their financial knowledge, and we can reveal that 41% of 18-24 year olds actually did state that their financial knowledge (with regards to how to apply for a loan, managing their own finances) came from their family and friends.
Women are more likely to speak to their family and friends for financial advice
When delving into the data, it shows that women are more likely to get their financial knowledge and advice from their family and friends.
Over one third (38%) of young women said they would speak to family and friends, while only 26% of men said the same.
57% of young Brits surveyed got their financial knowledge without help from family and friends
Digging deeper into the multiple choice survey, MoneySuperMarket can reveal that 57% of 18-24 year olds gathered their own financial knowledge, without the help from family and friends. This number includes those surveyed who said they had researched online themselves, or used social media platforms, such as TikTok, Instagram, Facebook and YouTube, and did not include those who selected the ‘family and friends’ option.
Jo Thornhill, money expert at MoneySuperMarket said: “With recent news that more than half of young people ‘have been targeted by fraudsters’, it’s important to start to get to grips with money issues from an early age - and family and friends can help with this. This might include understanding the benefits of saving, managing a bank account and being aware of different types of borrowing.
“However, it is encouraging to see so many young people looking to become financially savvy by exploring different means of understanding personal finance. It’s just important to always ensure everything you are reading is correct and from a trusted source”.
TikTok is the most popular social media platform for financial knowledge for Gen Z’s
Surprisingly, one fifth (20%) of the young people surveyed said their financial knowledge came from TikTok, indicating how the platform is growing in popularity for the younger generation.
FinTok boasts over 11 billion views on videos
Finance TikTok, or FinTok, is turning Gen Z’s heads, with over 11 billion views combined for the hashtags #finance and #personal finance. So, it’s little surprise that young Brits are turning to the platform, particularly if they are not learning about money management at home.
TikTok videos tend to be around 15 seconds long, some longer, which could mean that the short bursts of key information are what young Brits (18-24) are looking for. However, with shorter videos, there is the potential to miss out on key points of information.
Jag Singh, a Finance TikToker, boasts 41,000 followers, with more than half a million likes on his videos. He spoke to MoneySuperMarket about the questions his followers ask, and the answer is investing. He said: “A lot of people still find the investing world intimidating. There is so much initial jargon and knowledge one has to learn before they begin. Thus, a lot of people ask questions like: which platform to use? How does one start investing? What are the different ways of investing?
One of his top tips for younger people is to “always do your own research before getting into anything.”
Men are more likely to use TikTok to develop their knowledge on personal finance
Over 51% of young men surveyed said they had used TikTok, YouTube, Twitter and Instagram to develop their knowledge of personal finance. 30% of women said the same, highlighting, again, that women seem to be more comfortable and open in discussing finances with friends and family, as opposed to researching online.
19% of young people surveyed also use YouTube to develop their knowledge on borrowing and finances
Coming a close second to TikTok was YouTube but, surprisingly, TikTok is surpassing the platform for advice. 19% of 18-24 year olds said their financial knowledge on borrowing and managing money has come from the platform.
The same cannot be said for other social media platforms. Only 11% stated they used Instagram to develop their financial literacy, and 5% used Twitter.
Almost one fifth found it easier and felt more confident applying for a loan than they would borrowing from family and friends
To understand the financial knowledge of young Brits further, MoneySuperMarket conducted further research and surveyed 1,000 18-24 year olds to discover how comfortable they were to talk about borrowing money with their family and friends, and if they would choose to apply for a loan, rather than use their family and friends.
18% of the young Brits surveyed said that they found it ‘easier to apply for a loan’ and felt ‘felt confident applying for a loan’ than they would reaching out to family and friends to borrow money.
Young men also felt more confident applying for a loan, although the difference between them and women was just 2%.
A further 15% actually stated that they like to ‘do stuff on their own’, which is why they would opt for a loan as opposed to borrowing from family or friends. This suggests that younger Brits could be looking to be more financially independent.
25% said they opted for a loan due to not discussing finances with family or friends
Respondents could select multiple choice for this survey. But looking further at the data, we can see that 5% solely selected that they would opt for a loan as they ‘don’t discuss financial issues’ with family. A further 20% only selected that they have ‘never spoken about money with family’.
If you are struggling to speak to your family about money, here are some tips to start.
Schedule a chat or call in a place you feel comfortable
Just start small - it’s likely that you will have more than one conversation, so you don’t need to discuss it all at once
Similarly, it might be best to just start the conversation with one family or friend, before opening it to others. That way, you can choose to speak to the person you feel most comfortable with talking to
Men are more likely to rely on a loan rather than borrow money from their friends and family
34% of men said that they don’t ‘speak about money with family’ and wouldn’t ‘discuss financial issues’. Instead, choosing to rely on a loan as opposed to borrowing from close family and friends.
However, only 25% of women said the same, suggesting that younger women are more open to the conversation of personal finance and how to borrow from an earlier age.
But, positively, 18% of young men and women felt confident in borrowing money, specifically applying for a loan, suggesting they felt assured in their financial knowledge.
The second most common loan enquiry for young Brits was to reduce debt
While the most common enquiry for loans for 18-24 year olds in 2021 was for car loans, a large number was to reduce debt. In fact, according to internal data, 21% of loan enquiries in 2021 for 18-24 year olds was to reduce debt.
This could support the results that more young Brits are looking to turn their finances around without support from family and friends and, therefore, are applying for loans to clear their debts.
How to apply for a loan
Applying for a loan is a straightforward process. But, before doing so, it’s important to consider if you need the loan and that you are comfortable with the monthly repayments. Also check the fees and charges that might be attached, such as any early repayment penalties if you want to clear your loan early.
Additionally, your credit score plays a crucial role. It is likely to affect the type of loan - and the interest rate - you can get.
If you do decide to apply for a loan, you don’t need to worry about a long, complicated process. Here's our step by step guide to applying for a loan:
Think about how much you need to borrow. Always try to borrow what you need and not more, as you will be paying interest on your loan.
Decide on the time needed to pay off your loan. Are you looking to spread the cost over a few years, or can you pay it off more quickly? Remember to check any fees or charges that could be applied if you want to pay off the loan early.
You will then be asked personal details such as proof of income to prove you can keep up the repayments for the loan, and most lenders will ask what the loan is intended for - such as a car or debt consolidation.
Once you have compared different loans, chosen the best for you, applied and been accepted, you will receive the funds, usually directly into your chosen bank account. It’s important to ensure you understand what you are applying for from the outset and that you are able to keep up the loan repayments.
With most standard personal loans the repayments will begin straight away.
Methodology:
MoneySuperMarket conducted two surveys of 1,000 18-24 year olds. Respondents were able to choose multiple answers. Any discrepancies in percentage are due to this. Surveys conducted in March 2022.
1 https://www.ft.com/content/c4febc28-09f8-11ea-bb52-34c8d9dc6d84
