Financial Services: Age

Summary

As this review has demonstrated, age plays a guiding role in the individual and collective experiences of poverty. From a financial perspective, it also appears to have a significant impact upon the frequency of use, and type of financial services people use.

This section provides an overview of the relationship between age and financial services. However, it is strongly related to the following areas:

Age operates in conjunction with a range of personal characteristics. Therefore, we would suggest viewing this section with specific consideration to the following:

 

Key Facts and Figures: United Kingdom

Research by the Personal Finance Research Centre presents a robust dataset analysing issues of credit and debt. More specifically, within their UK sample of 1,451 participants:

  • People under the age of 29 are significantly more likely to use online payday loans (37%) and retail payday loans (32%) than older generations.

This age bracket is also over-represented in the use of pawnbrokers (28%).

Generally speaking, those over the age of 29, tend to utilise home credit as a source of short term income.

Source: Personal Finance Research Centre. 2013. The Impact on Business and Consumers of a Cap on the Total Cost of Credit.

Research by the Money Advice Service (2013:1) explores the concept of over indebtedness.

This term covers “individuals who have been at least three months behind on their bills in the last six months, or say they feel their debts are a heavy burden”.

The research suggests 8.8 million people are indebted within the UK.

Whilst survey research of a 5000 sample, presents the following demographic insights:

  • 41% of people in full time work feel over indebted.
  • 21% of 18-24 year olds are over indebted.
  • 22% of 25-34 year olds are over indebted.
  • 32% of 35-44 year olds are over indebted.
  • 29% of the Glasgow population are over indebted.

Furthermore, the survey details experiences of debt by age. Data from 18-24 (in full-time employment) provides the following information:

  • 50% find keeping up with their bills is a heavy burden.
  • 79% have fallen behind on their credit commitments in the last 3 months.
  • 74% would describe themselves as being in debt.

Data from the 25-34 (in full-time employment), presents the following:

  • 56% find keeping up with their bills is a heavy burden.
  • 72% have fallen behind on their credit commitments in the last 3 months.
  • 78% would describe themselves as being in debt.

Whilst data from the 35-44 year old age group (with families), provides the following information:

  • 61% find keeping up with their bills is a heavy burden.
  • 76% have fallen behind on their credit commitments in the last 3 months.
  • 84% would describe themselves as being in debt.

From this, it is clear that issues of debt impact different age groups through a range of mediums. Even as an individual’s wages increase, financial pressures appear to simultaneously increase.

Consideration should therefore be given to individuals and families from a variety of ages, to ensure tailored, specific advice is available when required.

Source: The Money Advice Service. 2013. Indebted Lives: The Complexities of Life in Debt

Research by the Competition Commission, which surveyed a sample of around 1000 people, presents the following information on payday loans:

  • 21% of payday loan customers were aged 18-24, despite accounting for only 12% of the UK population.
  • 28% of payday loan customers were aged 25-34. This group comprises 17% of the UK population.
  • 22% of payday loan customers were aged 35-44. This group accounts for 17% of the UK population.
  • 20% of payday loan customers were aged 45-54. This group comprises 18% of the UK population.
  • 9% of payday loan customers were aged 55 or over, despite totalling 37% of the total UK population.

The data therefore suggests younger people under the age of 44, are significantly over-represented in terms of their use of payday loans.

Source: Competition Commission. 2014. Research into the Payday Lending Market.

The 16-24 year old age group is most likely to be unemployed and anecdotal evidence suggests once within work, they are most likely to be situated within the lowest income deciles.

Subsequently the importance of providing easy to understand and accessible financial information from an early age is of paramount importance. Further interventions amongst the 18-30 age bracket may also contribute to increased financial awareness in later life.

Preferred Methods of Engagement

The debt charity, StepChange, present data suggesting consideration should be given to the various methods of engagement different age groups use when seeking debt advice:

  • People over the age of 60 are significantly less likely to contact the charity.
  • Those between the ages of 25-39 are over-represented in their contact with the charity.
  • People over the age of 40 are more likely to contact via telephone.
  • Whilst those between the ages of 18-39 are more likely to make contact via the internet. 

Source: Stepchange. 2013. Personal Debt 2013: Statistic Yearbook Findings.

The following table details the preferred method of engagement when discussing issues of debt:

  Face to face Email Post Telephone Website
18 – 24 year old first time workers 39% 32% 11% 32% 22%
25-34 year old full time workers 31% 31% 9% 34% 25%
35-44 year old (with families) 33% 31% 7% 34% 20%
Total sample 31% 29% 8% 32% 21%

Although the figures don’t fluctuate greatly, they do provide an indication of the preferred methods of contact across the age groups. Face to face, along with telephone contact appears to be the most preferred method of communication.

Source: The Money Advice Service. 2013. Indebted Lives: The Complexities of Life in Debt.