A quarter of 30 to 35 year olds, of which there are 4.7 million in the UK, have admitted to putting off life milestones, such as having children or buying a home, due to being one of the least financially resilient groups in the UK, according to new research from LV=.
Not only is the group worried about the financial impact of achieving these milestones, but 17% of them claimed that they do not have enough financial confidence to handle them. Furthermore, 43% of the respondents in this age group do not feel they are capable of handling a financial crisis, with almost three quarters of them falling short of the Money Advice Service’s (MAS) recommended amount of savings to be financially resilient.
LV= and British Psychological Society associate fellow David Lewis has identified this group as the ‘Peter Pan Generation’, and Lewis previously found in another study that 70% of under 35s believe their youthfulness will last forever, therefore never properly preparing for future risks.
Additionally, the research found that a further 22% of those in their early 30s do not know how long they would be able to cope financially if they found themselves unable to work due to illness or an accident, for instance. Despite this, fewer than one in twelve worked adults have their own income protection insurance in place.
Commenting on the findings, LV= head of policy for protection Justin Harper said: “It’s deeply concerning that many of those in their early thirties are delaying major life milestones because they feel worried, unconfident and ill prepared financially. And it is worrying that so few of the Peter Pan Generation can withstand the financial effects of an unexpected income shock - they have no Plan A, nor a Plan B.
“With low financial confidence and little provision to handle a financial crisis, there is a need and opportunity for advisers to help this generation with their financial planning so they feel more secure. When it comes to the life milestone of buying a new home, advisers are ideally placed to include protection in every mortgage conversation with clients. Using the LV= Risk Reality Calculator is one simple way to transform those conversations by making risk far more personal and real, and helping ensure our Peter Pans do have a back-up plan.”
Lewis further added that, due to a universal emphasis on ‘staying young’, many people within this age group are “in a state of denial or avoidance” when it comes to facing the future.
“Previously younger generations would likely inherit their parents’ estate while relatively young, but increased life expectancy means this is no longer the case. By not giving proper weight to their financial status, this group could be at risk of finding themselves with a significant level of responsibility without adequate financial preparation or protection.”
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