FCA study reveals the true state of Britain's youth

Simoney Kyriakou

Simoney Kyriakou

Millennials have it all, don't they? A cosseted lifestyle, an indefatigable sense of being right, an uncanny openness that comes with being inured in social media and an expectation of putting right all that has been wrong in generations before them.

For these reasons, and the fact they can take a good selfie without looking like they've been startled out of REM sleep at 2:41am by a paparazzi, I both admire them and want to strangle them. 

They may be right-on and completely attuned to an increasingly automated lifestyle, but they need to be shaken out of this sense of security. Not everything is going to be alright. Especially for them. Life is, as Hobbes said, going to be nasty and brutish and - if demographic trends continue - longer than they expect.

Young people are coming out of university saddled with £40,000 to £50,000 worth of debt. They are competing for jobs in an increasingly global world, but without the sort of wage inflation I enjoyed in my callow youth. 

They are coming to maturity and adulthood at a time when the hallmarks of being independent: having a job, buying a house, renting a great flat in an urban location - are far above the financial capabilities of many millennials. House prices are at a national average of £225,956, according to the Land Registry.

But the median gross annual earnings in the UK stands at £22,044. Millennials on low starting salaries will have to save at least six times their annual salary if they are to get a decent mortgage - no mean feat, considering some rents in the City of London are £30,000 a year. It's hard enough for the average individual to save £10,000 a year. 

By this measure, it is no surprise that fewer and fewer homeowners are millennials or the younger end of Generation X. Figures from the Financial Conduct Authority's Understanding the Financial Lives of UK Adults survey paint a stark picture of the financial resilience of young people.

According to the 12,865 UK adults on which the survey was based, 27 per cent of adults are 'surviving' and 8 per cent are in difficulty. But extrapolate this across the age groups, and those who are 18 to 24 years old are the least financially resilient. 

They have tiny savings - an average of £8,000 in cash. Those aged 25 to 34 have an average of just £11,000 cash savings. Not enough for a deposit on a home. It is no surprise then that only 3 per cent of the youngest age band own a property outright, and only 13 per cent have a mortgage. In fact, 49 per cent of 18-24 year-olds are renting.

Some 33 per cent have made an unauthorised overdraft in the past 12 months, and the youngest age bands are most likely to have fallen prey to loan sharks or high-interest payday loans. But only 9 per cent of millennials have personal protection products such as income protection or life cover.