Young adults face more financial anxiety than any other age group – The Exeter
24% of 25 to 34-year-olds said their finances had negatively affected their mental health over the past six months.
Young adults are saving more than any other age group but are also the most likely to report that financial pressures are affecting their mental health, according to research from The Exeter.
The insurer’s Consumer Health and Finance Tracker found that people aged 25 to 34 save an average of £447 a month, more than £2,500 a year more than those aged 45 and over.
Despite this, 21% said they feel substantially less financially secure than they did a year ago.
The research also found that 24% of 25 to 34-year-olds said their finances had negatively affected their mental health over the past six months, compared with a national average of 15% and just 7% of over-55s.
More than a quarter (27%) of those aged 25 to 34 had taken extended time off work due to mental health or illness during the same period, the highest proportion of any age group and above the national average of 18%.
The Exeter also found younger adults were more likely to rely on their savings than Statutory Sick Pay (SSP) when taking extended time off work, with 29% using savings as their main source of income compared with 13% relying on SSP.
Meanwhile, adults aged 45 to 54 reported lower levels of financial anxiety despite saving less, with 26% saying they save nothing each month.
Jack Southcott, head of protection proposition at The Exeter, said: “The data presents a picture of a generation that is actively saving but is also carrying a level of financial anxiety that’s showing up in their health and their time at work.
“Saving more is not providing the security this age group is looking for and, when that concern starts to affect mental health, the financial consequences can quickly stack up.
“It is encouraging to see that younger generations are thinking more on their long-term finances, but we need to ensure they are supported in a way that can ease anxiety and not add to it.
“Advisers have a real opportunity to engage with younger workers to address these concerns. If the sector were to continue to focus on the traditional audiences, we risk missing a whole generation whose needs look very different but are just as important.”
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