Vulnerable young people are #PayingThePrice

Posted by Fiona Bruce MP / Thursday 11 December 2014 / Financial education

We know that with financial education young people can make better financial decisions and avoid unmanageable debt. Those who experience financial problems are more likely to take risks, be unsafe or become homeless.

Yet, some of the most vulnerable young people are more likely to miss out on good advice because it is mainly encountered at home or school. There is a pressing need to ensure financial education reaches the most vulnerable young people.

For their report, Paying the Price, Action for Children surveyed young people across the UK, and spoke to young people who use their services and the staff who provide vital support. They have found that:

45% of children and young people across the UK have not received financial education or do not know if they have done so.

Of the children and young people who have been financially educated:

  • 87% learn from parents or carers
  • 27% learn at school

Sadly, Action for Children knows from their experience working with young people in some of the most disadvantaged communities that for some, school and home are not positive places to learn. They may have difficult relationships with family or not be engaged in education or training.

The report highlights that these young people are already at greater risk of getting into debt and the consequences can be devastating. They are often forced to become independent younger than their peers but are less likely to have support. They might live on a low income, be unemployed, be homeless, or on the edge of care or custody.

Financial problems stop young people, who are already facing challenges in their lives, from achieving their potential. 

Financial education is crucial 

As Chair of the All Party Parliamentary Group report on Financial Education for Vulnerable Young People, and have long recognised that more needs to be done to help vulnerable young people learn about money.

Action for Children’s research and findings complement work by the APPG in its Financial Education for Vulnerable Young People Inquiry. There have been positive steps in recent years to recognise the problem and make financial education more inclusive. But clearly, those outside mainstream education or who do not receive enough support at home continue to be left behind. 

For many, payday loans and high street lenders are popular choices for vulnerable young people.

42 per cent of Action for Children’s frontline staff know young people aged 16 to 25 years old who are accessing high interest loans or products. That’s around 3,500 vulnerable young people.

It is concerning that these findings show some young people do not understand the risks involved. Young people have said they are confused by the difficult language of loan agreement and do not understand the small print. For some, this is made worse by poor literacy and learning difficulties.

Government must act

Action for Children is calling on governments across the UK to prioritise preventing vulnerable young people from experiencing financial difficulties.

The report calls for a joined-up approach to provide targeted support for those young people who are least likely to be financially capable and most at risk of debt. This message echoes central calls from the APPG’s own inquiry, and it’s time for government to take the lead.  

Let’s talk about money 

Everyone can join in the conversation. Let’s expose this hidden problem and push financial education for the most vulnerable youngsters up the political agenda. Here are some simple actions you can take today:

  • 1 in 3 young people have NOT been taught to manage money - have you? Take a short survey here
  • Sign up to Action for Children’s Thunderclap and help spread the word 

Fiona Bruce MP

"Taking a loan out feels positive but actually it turns out negative."

Young person

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