Lack of Financial Education Affecting the Young Generation



Today’s youth seem to struggle a lot with gaining useful financial knowledge. The sum of what contemporary young people know about finance could, arguably, fit on the back of a stamp. 

Cushon conducted a survey on the topic of financial intelligence and found that over 62% of people under the age of 35 believe the older generations are a lot smarter when it comes to money management, particularly at retirement age. Baroness Ros Altmann echoes this sentiment, noting that a deficiency of educational material about finances is what has held young people back from attaining monetary independence and well-being. 

Why Is There Limited Financial Knowledge?

An adage pertinent to this topic is ‘to cut your coat to suit your cloth.’ Being penny-wise and avoiding pound foolishness can save a lot of financial heartache in the future. If you can spend money without resorting to loans or debt, then you have successfully cut your coat to suit your cloth.  

Proverbial wisdom is applicable because the older generation sees overspending as the younger generation’s main problem. Modern youth tend to live above their means. With readily available credit and excessive pressure to consume, things are not the same for 30-year-olds today as they were for 30-year-olds in the 1950s and 1960s. 

The younger generation also seems to place less value on the healthy financial habit of saving for pensions. At least 30% of those under 35 years old believe they can delay thinking about pensions for at least another decade

The youth also tend to struggle because workplaces have evolved. In the days of yore, employees’ pensions were automatically taken care of by their organizations. Nowadays, it is the employees’ responsibility to determine how much they will contribute to their retirement fund. If any benefit scheme is in place, it usually sets aside minimal amounts into the pension fund. Unfortunately, far too many young people believe this minimum to be a sufficient savings percentage, and that it will see them through their retirement.  

Research results from the U.S. also indicate that the reason so many young people are seemingly unbothered about their financial future is that they have reasonable expectations regarding their inheritances. Millennials are the children of Baby Boomers – a generation known for being wiser when it comes to wealth management. The younger people benefit a great deal from the hard work put in by their parents’ generation and merely need to endure a few decades of labour before they can cash in an enormous inheritance check. Relying on such a vast amount of money to come in at a future point will undoubtedly diminish the motivation to become independently financially savvy. 

Socially Responsible and Tech-Driven Investment Options

Perhaps younger people would be more concerned about their financial futures if they had the right motivation to be concerned. 

Lack of understanding aside, a company’s eco-credentials seem to play a large part in how young people perceive investments. At least half of the young people surveyed indicated a desire for climate-conscious investments that contribute to the planet’s well-being. Wealth management firms like Moneyfarm keep pace with this evolution of the markets and this new sensitivity as they consider environmental impacts as a risk, or opportunity, in their assessments. Other wealth management companies, and other reputable investment specialists, also provide socially sensitive funds in which their clients can invest.  

Technology plays an essential role in the lives of many of us today. Millennials and Gen Z in particular feel this role keenly as they are decidedly more familiar with technology than their predecessors. To help them boost their financial literacy, information about savings and pensions should – ideally – be more readily available through apps and other friendly technologies. The youth would certainly pay more attention to their financial futures then.  


Young people need help in thinking about their futures. According to Baroness Ros Altmann, three things are necessary to coopt youth participation in financial literacy. Firstly, direct communication regarding the value of saving up for the future. Secondly, straightforward technology and friendly apps, as aforementioned. Finally, employers should be cooperative and provide opportunities to learn about finance in the very place where young people earn their finances.