New research by Fidelity reveals that young people have felt least financially secure as a result of the Covid-19 pandemic, with 18-34- year olds being most likely to worry about their financial position. Emma-Lou Montgomery provides comment and practical tips for saving money
With the Government recently announcing the extension of lockdown, Fidelity International looks at the effects of the pandemic on the younger generation.
Research by Fidelity has shown that the past year has been particularly difficult for young people, with UK adults aged between 18 and 34 most likely to be worried about their financial position due to Covid-19 (51%), compared to 46% of 35-54-year olds and 21% of over 55s.
The research also shows that three-fifths (60%) of those in this age group were placed on furlough, made redundant, or had their pay or hours reduced during the pandemic, reflecting Government figures showing that as of April 2021, half a million jobs held by those aged 24 or under were on furlough, despite unemployment rates slowly decreasing2.
Those who saw a fall in their personal income as a result of Covid-19, say they had to make sacrifices due to their situation, with just under a fifth (18%) of 18-34-year olds delaying moving house and one in ten arranging help or carers for their parents or elderly relatives so they could work longer hours.
However, despite the personal and financial challenges faced by young people during lockdown, almost half (43%) of 18-34-year olds said they are actively making decisions about where to save or invest their money.
In fact, Fidelity saw the number of new Personal Investing customers aged between 18 and 29 double in 2020 compared to 2019. In the same time period, the number of new Personal Investing customers aged between 30 and 34 almost tripled.
Emma-Lou Montgomery, associate director for Personal Investing at Fidelity International, comments: “The impact of the Covid-19 pandemic on young adults has sometimes fallen by the wayside, despite almost two-thirds of 18-34 year olds being placed on furlough, made redundant, or having their pay or hours reduced during the pandemic, and we are already seeing the effects on this generation mentally, socially and financially.
“The impact of the pandemic on employment, day-to-day life and the economy as a whole has brought money concerns to the fore, and for many this means having to address their personal finances and, in some cases, make difficult choices that they haven’t faced before.
“A significant proportion of young people have struggled financially during the pandemic, which means they may have had to delay certain life events, work longer hours or turn to their savings to supplement their outgoings. Using up savings or working longer hours will undeniably cause worries in the long term for those affected, and these anxieties can filter into daily life and other concerns.
“On the other hand, young people who were less financially disadvantaged by the pandemic may have used the past year to focus on their finances, and in some cases start investing to secure an income for their future. While some may consider this a practical solution to the events of the past year, it’s important to recognise this does not apply to all, and that millions of young people still require assistance when it comes to building back their financial futures following the pandemic.”