Young people 50% more likely to fund key life milestones with credit than their parents
We compare the young and the old generation on when they expect to hit important milestones.
Despite soaring house prices and sluggish wage growth, young people are confident they will hit key life milestones six months earlier than their parents’ generation, according to research from free credit score checking service ClearScore.
The research shows a shift in financial attitudes between generations. For example, 50% of young people use some form of loan to fund their wedding, with one in five putting the big day on a credit card. By contrast, just 18% of baby boomers paid for their wedding with a loan.
People in their twenties confidently use credit to fund other important milestones too: 42% use credit to help cover the costs associated with their first child; 49% do so to move out of their parents’ home and 43% of first solo holidays are paid for with credit.
Their parents had a very different experience with just 13% using credit when they had their first child; 18% flew the nest using credit and 17% took their first holiday without their parents with borrowed money.
The research also shows that, while the timeline of young people’s aspirations maps closely to their parents’, financial pressures are still holding some people back. A quarter would like to have got married sooner if they could have afforded it, while 20% would have moved out of their parents’ home more quickly. Overall, just 5% said that their finances had not held them back from achieving key milestones when they would have liked to.
Justin Basini, CEO of free credit score checking service ClearScore said, “Today’s young people share the same goals and aspirations as their parents, but they’re using more flexible ways to afford key milestones. This isn’t a bad thing as long as they manage this credit responsibly. Access to clear financial education is key to this. We think that by making credit scores free and easy to understand and demystifying the myths which plague personal finance, we can help young people get on top of their money and live their life the way they want.”
The research also shows variation across the country, with 58% of twenty somethings in London using credit to help cover the cost of their first child, compared to just 37% in Scotland. Just 48% of young Scots required credit to move out of their parents’ home compared to 58% of young Londoners.
Hatty Webster/Tom Broughton/Thom Norman 0207 924 5656 [email protected]