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| Has Anyone Seen My Twenties? |
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Premature aging is spreading across the UK and is particularly prevalent amongst
recent graduates in the UK who, upon leaving university, are plunged straight
into fears about the property ladder, pensions and paying off their student
debts. These young people graduate at the age of 21, do not pass go and head
straight to 35, worrying about their personal finance investments before finding
their feet in life.
These un-twentysomethings lifestyles can generally
categorised within two extremes, either not going out at all because they have
no money or going out and partying every Friday and Saturday night, because they
feel directionless. Groups such as these may not seem particularly worrying, but
many graduates are finding that they are working themselves to the bone by
taking on two jobs and working seven days a week just to meet their bills. Some
young graduates are known to even take on multiple jobs so they can bolster up
their salary details for mortgage applications. By doing so, they commit
themselves to a loan that can only be repaid through exhaustion.
These
characteristics have been assigned to the emergence of the quarter-life crisis,
but this epidemic of financial concern tends to be a problem for those who have
been through higher education, rather than those who took full time employment
straight after leaving school. This represents a worrying trend given the
government encouragement for increased school leavers to attend university.
UK graduates find it particularly tough as they are often groomed to
believe that they can get good salaries and corporate jobs. Yet many young
people leave university only to be hit by the hard reality that the competition
is immense and that expectations must be lowered. Some graduates, unable to find
work immediately after graduation, get themselves into further debt by taking
out career development loans and other forms of commercial borrowing to
undertake a further qualification.
Due to the volume of UK graduates on
the market, the need to stand out has made life much more competitive. Contacts,
professional qualifications, Masters degrees and relevant work experience are
now required to help secure a "graduate" career.
Moneynet ( http://www.moneynet.co.uk ),
a consumer finance website, released a recent report stating that graduates need
to check their credit histories when they finish their courses. Richard Brown,
the CEO of moneynet warned that graduates could face a credit history nightmare
at the end of university due to relocation, late payments and low credit.
Moneynet has taken steps to provide publications which can help students and
their families finance higher education, but the sheer scale of the student
market now dictates that financial problems go beyond a lack of financial
planning.
According to Credit Action ( http://www.creditaction.org.uk/debtstats.htm ), a third of
prospective students underestimate the cost of university, with 25% of freshers
expecting their parents to foot the bill. Both parents and students apparently
underestimate the true costs of university �parents by almost £4,000 and
students by over £6,000. A quarter of parents state that they still have adult
children living at home and over 14% of parents with adult children have
remortgaged their homes or taken out loans to help their children out of the
financial quagmire. Student debts and difficulties getting onto the first rung
of the housing ladder are given as the main reasons for offspring being unable
to leave home. First-time buyers are being required to save harder and for
longer to secure their first home, in spite of a supposedly cooling housing
market.
It also seems that parents who try to help out their offspring
by giving cash to get them out of their financial struggles may be doing more
harm than good according to the NatWest. The report shows that those who
accepted payouts from their parents were 25% more likely to then go overdrawn in
the future than those who didn't take this form of financial help. Overall a
third of young people said their parents had never taught them how to manage
their money. If you're a parent and concerned that your children need help with
managing their pocket-money, moneynet offers a family finance guide with a few
suggestions.It doesn't offer a magical solution to student debt, but it might
provide some help in financial management.
Resources:
http://www.creditaction.org.uk/home.htm
http://www.moneynet.co.uk/student-finance-guide/index.shtml
http://www.moneynet.co.uk/family-finance-guide/index.shtml
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