Today's young workers wait longer for financial independence

The Momentum UK Team 01 May 2013

Young workers expect to wait seven years longer than their parents’ generation to achieve financial independence according to a report released today.

The report is based on a survey conducted by Legal & General which took into account the views and circumstances of more than 1000 workers in the 18-27 year old age group, so-called “profreshionals”, and 1000 parents with children within that same demographic.

Those in the young age group expect to or have waited until age of 25 to achieve financial independence, seven years after the age at which their parents said that they achieved a similar state of independence.

Of those who were not yet financially independent 15% didn’t expect to be so until they reached the age of 30 or more. On average an annual salary of just over £18,000 was considered necessary to reach financial independence, a figure just short of the average salary of those surveyed which was £19,600.

44% of 18-27 year olds taking part in the survey said that they found it stressful managing their finances, while 52% have taken jobs for the purpose of generating income rather than with job satisfaction in mind.

Mike Lawler, from Legal & General, said:

"Although nearly two thirds, (61%) said it was much harder to find work than it was for their parents, younger workers are showing their steely determination to succeed in today's challenging economic climate by working hard and unfortunately for some, in jobs they don't particularly enjoy."

Jennie Bond, a TV broadcaster who has a daughter who falls into the ‘Profreshional’ category said:

"It's encouraging to hear that so many young people are managing to achieve financial independence. Being able to ‘pay your own way' for the first time brings a real sense of achievement and self-esteem. Even if it's taking seven years longer than my generation did to achieve this, younger workers should persevere to find a balance between a job that they love and one which pays a living wage.

"As a parent, you want to do everything you can for your children to give them a foot onto the career and housing ladder. Rent, living costs and bills can easily swallow up the majority of a young worker's pay packet and that's before they've had time to think about enjoying the money they've earned."

While the Legal & Genral report focussed on young workers, there are an increasing amount of young people in the UK who are unemployed. Recent data from the Office for National Statistics showed that the number of unemployed 16-24 year olds rose by 20,000 between September and November 2012 to reach a total of 979,000.