Yorkshire's young chasing payday as financial pitfalls take toll

Just over a third of young people in Yorkshire and the Humber, 37 per cent, consider themselves as savers, compared to almost half, 49 per cent, nationally - but four out of ten save at least a quarter of their disposable income each month.

However, the region’s “millennial” generation of 18 to 34-year-olds are showing signs of better money habits than “Generation X” - those aged between 35 and 55, credit checking company Experian has found.

Its research has shown the impact that parents’ spending habits have on their children’s financial health. Nationally, young people are twice as likely to run out of money by the end of the month if their parent had a negative rather than positive influence on their finances.

In Yorkshire, 66 per cent said their parents have had a positive influence on their money management behaviours; while 13 per cent said their parents had have a negative influence.

The report revealed the most common financial pitfalls for Millenials in Yorkshire, and showed that their average savings was much lower than the national average - £5,806.88 compared with £8,384.25

Leeds-based national debt charity StepChange said young people were increasingly coming to them for help.

A spokesperson said: “It is welcome to see that so many have had positive financial influences from their parents, but these influences can only take them so far. Young people are one of our fastest-rising groups seeking our advice on debt and are the most likely to live in rented accommodation and be in insecure work, such as temporary or zero hours contracts, which can make them more vulnerable to debt.

“This can have a huge effect on someone’s finances, with 2.6 million people in already in severe problem debt and many more living on the edge financially.

“Helping children to learn about money management is a useful tool, but it is also vital that people have sufficient safety nets available to help them recover quickly when they run into financial difficulty.”

Nationally, 33 per cent of those whose parents had been a negative financial influence had gone into an unplanned overdraft, compared with 19 per cent whose parents had been a positive influence. In Yorkshire, 14 per cent of younger people said they had had their card declined in the past without realising they had run out of money.

Young people in the region appear to be less financially savvy than the national average.

Experian’s report showed that more of the region’s 18 to 34 year olds had taken out a short term loan, 14 per cent compared with 9 per cent; been refused credit, 22 per cent compared with 16 per cent; and missed a credit repayment, 20 per cent compared to 14 per cent.

More than one in ten, 11 per cent, had had a county court judgement, compared to a national average of 5 per cent.

And it doesn’t get better with age. Those in Generation X - aged between 35 and 55 - have £13,969.39 in savings, almost £5,000 less than the national average of £18,613.

Clive Lawson, managing director at Experian, said: “It’s striking to see just how much of an impact parental influence can have on the financial wellbeing of Millennials in adulthood.

“What this research made clear to me was the opportunity that we as parents have to set foundations by helping our children learn from our experiences of managing money and enjoy the advantages that might bring them later in life.”