Press Release: Young adults lack plans to reach their financial goals

Thursday 1st September 2016

Young adults have financial goals but lack plans to reach them

New research published today by the Money Advice Service* has identified that while over two thirds of young adults (69%) say they have financial goals, most don’t have a plan to reach them. This lack of financial planning could mean that many young adults may fall short of achieving their aspirations.

Analysis carried out for the Money Advice Service by University of Edinburgh Business School, identifies three main groups of young adults**. There are ‘Planners’ (37%) who have financial goals and a plan to reach them. ‘Dreamers’ (36%) who tend to have financial goals but no plans to reach them and ‘Drifters’ (27%) have neither goals nor plans. The report finds that when young adults do make a plan, this is usually for short term ‘Save to spend’ goals. Nearly half (47%) reported saving for a holiday and 30% were saving for a car.

Attitudes to money differ greatly between the three groups. Over half of ‘Planners’ (52%) understand it is important to keep track of income and expenditure; over two fifths (45%) feel it is important to shop around to make money go further; and 37% think it is important to save money for a rainy day. 54% of ‘Dreamers’ get anxious thinking about their financial situation. Only one fifth of ‘Drifters’ (20%) agree that saving for a rainy day was important.

The report discovered that there are a number of factors linked to young adults’ motivation to set financial goals and make a plan to reach them. This includes their level of financial confidence and independence. Young adults are the least confident age group when it comes to financial matters (45% compared to 58% of all adults) however, our study suggests that financial confidence grows with experience and not just with age.

Financial confidence tends to increase when young adults undergo a change in their lives that pushes them into independence, for example; going to college or university; leaving home and renting a property; job seeking or getting a job. Dreamers and Drifters are more likely to be financially dependent on their parents. This reliance on family for support and guidance often delays the need to make important decisions about their money, in turn reducing experience of financial matters and therefore financial confidence. Young adults who are least confident are three times more likely to have problem debt. Of the 24% of young adults who are over-indebted, only one in ten are seeking advice.

Beyond family, many young adults are unsure where to turn to for help with their money. They are overwhelmed by the quantity of information available and there is confusion about what support is available both on and offline, with some services perceived as being only for people who are in crisis. The research also highlights the challenges faced when trying to engage young people and encourage them to think about their financial goals and plans.

There are some simple steps that young people can take to plan for their financial goals:

1) Plan out what you want to achieve and when, however short-term – Think about the type of things you want to save for, the likely total costs, and when you need the money by. This might be for transport costs to get to work, college or university; the cost of a trip or holiday; buying and running a car or scooter; saving a deposit for a flat or house.

2) Make a budget – The Budget Planner can help with this. Work out how much money you will be able to save each week or month. Our Savings Calculator will help you plan out when you will reach your savings goal.

3) Be money savvy – Be clever with your spending to make sure you are able to put money away. Take a look at the Quick Cash Finder for ideas.

Caroline Rookes, Chief Executive of the Money Advice Service comments:

“This research is a valuable input to our strategy for improving financial capability across the UK. It is great to see that some young people have financial goals and are already starting to build good savings habits, but a worrying number of young people are not setting financial goals and may be storing up trouble for the future. We now need to motivate them to make longer term plans to help them achieve these financial aspirations.

“Families can help by encouraging their younger relatives to plan for their financial futures. There are plenty of tools and calculators available on the Money Advice Service website to help them find the information they need to help with this.”

You can try our quiz to find out if you are a Money Planner, Dreamer or Drifter here. More information about the research reports can be found on the Money Advice Service Website.


For more information please contact:

Money Advice Service Press Office

020 7947 0593 /


*The Money Advice Service has today published two documents:

· Young Adults Literature Review - Engaging with 16-24 year olds: A report by Family Kids and Youth – You can view this here

· Young Adults Financial Capability Deep Dive Report: A report by Tina Harrison, Caroline Marchant and Jake Ansell, University of Edinburgh Business School – You can view this here.

**Planners, Drifters and Dreamers information

YA Table

[1] Confidence in managing money and confidence in making financial decisions were measured on a 10-point scale: 0-3 = not at all confident; 4-7 = fairly confident; 8-10 = very confident.

[2] Degree of financial dependency was measured on a 10-point scale: 0-3 = low financial dependency; 4-7 = medium financial dependency; 8-10 = high financial dependency.

About the Financial Capability Strategy for the UK

The Financial Capability Strategy was established as a ten-year strategy to address the stubbornly low levels of financial capability across the UK. The Strategy aims to bring together individuals and organisations to deliver a collaborative approach to improving levels of financial capability, as well as establishing the interventions that are proven to work and seeing that as many people as possible benefit from them. The strategy can be found at

About the Money Advice Service

The Money Advice Service is an independent organisation. It gives free, unbiased money guidance online at or via free phone on 0800 138 7777. Debt advice is also provided through a variety of partners across the UK. The Service was set up by Government and is paid for by a statutory levy on the financial services industry, raised through the Financial Conduct Authority. Its statutory objectives are to enhance the understanding and knowledge of members of the public about financial matters (including the UK financial system); and to enhance the ability of members of the public to manage their own financial affairs.