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Pandemic pushed age-related inequality to 'highest ever levels'

Pandemic pushed age-related inequality to 'highest ever levels'
 Credit: Chris Ratcliffe/Bloomberg

A third of adults feel they do not have a ‘healthy relationship’ with money, with the view particularly prevalent among millennials, according to research from First Direct.

Its January survey of more than 4,300 adults found 34 per cent agreed with the view that they did not have a healthy relationship with money.

Millennials were almost four times as likely to have an “unhealthy relationship” with money than those aged 55 plus, at 22 per cent versus 6 per cent, according to the online bank

Indeed, the research found 18-24 year olds had the lowest money wellness score (44 out of 100).

Meanwhile, those aged 55 plus had the highest score of 57, and were likely to have a higher level of income, savings, home ownership and job security.

The scores were based on the average proportion of consumers who provided a favourable response to statements measuring their attitudes towards money (by agreeing with a positive statement or disagreeing with a negative statement).

Chris Pitt, chief executive officer at First Direct, said the pandemic had “widened the differences in society to their highest ever levels”.

He added: “It’s hit younger adults the hardest – with the lockdowns impacting people entering the labour market, and furloughing particularly impacting service industry roles where younger people make up a higher proportion of the workforce.” 

This week UK Finance and Cifas warned of criminals targeting young people with fake job adverts online in a bid to recruit money mules.

The organisations said criminals were targeting young people whose job prospects had been impacted by the pandemic, by looking to recruit money mules to launder cash used to facilitate terrorism, drug trafficking and people smuggling.

The Financial Conduct Authority also warned that 12m adults were at risk of struggling financially as a result of the pandemic, with Black, Asian and Minority Ethnic and younger people most likely to be affected.

But overall, First Direct found the British public’s money wellness score had remained fairly stable over the course of the pandemic as a whole, at 49 out of 100 in January 2021, compared with 47 in the same period last year.

According to First Direct, this was likely due to factors such as reduced outgoings as a result of lockdown and support from the furlough scheme.

Guy Shone, chief executive officer of Explain the Market, who helped to develop the Money Wellness Index report, said: “While there is no doubt that some groups of the population have been hit much harder than others, we should be buoyed by an index that offers hope that the British public is largely weathering the financial storm.

“It’s a true testament to people’s resilience and ingenuity that – overall – family finances, money habits and confidence levels don’t look much worse.”

chloe.cheung@ft.com

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