Youth money ‘reality gap’ widening

Posted on May 14th, 2011 | Categories - News

Money expectations of young people are veering away from the reality of adult finances.

Young people expect to buy a home by 25.

The gap between young people’s ‘expectations and reality’ of money is growing, according to a new study.

Over 1,000 Scottish people between the ages of 12 and 19 were surveyed on their financial views by the Royal Bank of Scotland – more than half said they expect to be able to buy a home by the age of 25 despite the problems that many current first-time buyers are facing in the property market.

The study also found that young people believe that they will earn an average of £15,756 when they first leave education, which will rise to an average £33,769 by the time they reach 25.  At 35 they expect to be earning an average salary of £54,355.

Almost a quarter of participants envisaged getting into debt in the future with a further fifth anxious about their finances.

Just under 20% of respondents said they had a part-time job and 60% said they receive pocket money.

The study also highlighted that the average Scottish young person spends about £40 a month on clothes and shoes.

Jennifer Somerville, RBS’s regional MoneySense manager for Scotland, said: “This year’s results show that local teens are taking a real interest in their money, but it is clear there’s a growing gap between young people’s expectations and reality, that’s why it’s so important that we equip them with the knowledge and skills to make considered financial decisions for their future”.