IT IS dangerous to make assumptions about “the young”. Everybody does it. Politicians talk about the youth vote, advertisers bracket young consumers as one entity begging to be duped by celebrity endorsements.
Now, apparently, we are a generation of Kippers, a hideous acronym that I can’t bring myself to explain immediately. This patronising nonsense tends to alienate the very group that those with a product or idea to sell are trying to reach.
But there are some common themes facing anybody under the age of 25 — and the predominant one is debt. Young people are increasingly crippled by debt, dogged by the desire and need to spend money they do not have.
Education could be the key to easing the transition from dealing with pocket money to becoming embroiled in the debt that goes with adulthood today. The Financial Services Authority (FSA) has a role in consumer education, on top of its job of policing financial institutions. This week, the FSA published the first document from a working group aimed at increasing the financial literacy of 16 to 25-year-olds.
This age group needs help like never before. There is no escape from debt for today’s students, with the average graduate debt standing at £12,000 and rising. Financial institutions love younger consumers, whether they are students or workers. They are engaged in the moral equivalent of hanging around the school gates to get the youngsters hooked on a life-long debt habit they can’t afford. Want a credit card when you don’t have any income? No problem. How about a loan? Just sign on the dotted line.
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You can’t stop banks and lenders from trying to make a profit, and it would take an electoral miracle to give the Liberal Democrats the power to fulfil their vow to scrap university fees. So what do you do? The answer, according to Trevor Phillips, the chairman of the FSA’s working group alongside his role as chairman of the Commission for Racial Equality, is to encourage young people to do what comes naturally to them at that age: take control. He says: “We want to get out a single message. If you want to take control of your life, then take control of your money.”
While he accepts that finance education in schools would help, Mr Phillips believes that reaching teenagers just as they are handling their own money for the first time would grab their attention. “This is the first period in their lives when they have to deal with serious financial decisions,” he says. “We are allowing young people to endure heartache and stress, when perhaps they don’t have to.”
But, as the FSA’s initial report says, finance education for this group is “patchy” and suffers from a dearth of funding. Individual universities, colleges and Citizens Advice Bureaux are running their own initiatives, such as seminars on finance during freshers’ weeks.
Mr Phillips says that it is too early to say whether the working party will recommend central government funding for a nationwide drive to boost financial awareness among the young. With an admirable grasp of teenage psychology, he says: “It would be easy to say we need to get the Government involved, but the easiest way to kill off interest in the 16 to 25-year-old age group is to get a Cabinet minister to stand up and say we must have more financial capability.”
The message that control of your finances means greater control of your life is one that should appeal. A recent edition of The Money Programme on BBC Two found evidence that one in four parents with grown-up children is unable to enjoy having an empty nest. Their children are burdened by debt, struggling to get on the housing ladder and loath to leave home. Kippers, surely one of the most irritating acronyms ever invented, stands for kids in parents’ pockets eroding retirement savings. These “kidults” have no control.
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Personally, the thought of living at home never occurred to me. First jobs in journalism pay slave wages, and half my pitiful take-home pay went on rent, bills and my relatively modest £80-a-month student loan repayments. No longer a student, I still ate Pot Noodles, drank cheap cider and shopped at Oxfam. But there was satisfaction in paying my own way each month. There was also immense satisfaction to be had from half-price curry Sundays at the Poppadom in Cricklewood, from spending hung-over Saturdays on the sofa watching Sunset Beach and from having my first housewarming party and finding three people sitting in an empty bath drinking sherry.
These are the joys of being young in your first job. It is a fair trade-off for your mum’s cooking and more money to spend on clothes or cars. As Mr Phillips says, it is about having control of your life and breaking free from parental shackles.
But a good message is not enough. Next year, Mr Phillips and his working party intend to publish a strategy for equipping their target age group with essential financial skills. Without sufficient funding and fresh ideas for reaching them, more young people will cede control of their finances and lives to loan companies, the store card operators, the banks and, yes, their parents.