The number of young people finding it difficult to get by has dramatically dropped since the recession from 15 per cent in 2009 to 8 per cent by 2014, according to the Office for National Statistics.
In a report published yesterday, the ONS said the unemployment rate among 18 to 24 year olds has fallen from a high of around 20 per to 14 per cent while satisfaction with household income has shown a slight increase, from 51 per cent of the young population to 56 per cent. Debt has also fallen marginally, from £3000 to £2600.
“This is consistent with evidence of an improving economic situation for young people,” the ONS said.
Andy Cumming from Close Brothers Asset Management said: “A dramatic improvement in unemployment levels has allowed young people to feel much more optimism about their financial well-being. On top of this, decreased debt shows that many have opted to prudently pay down borrowings, rather than place money in savings with much lower interest rates.”
However, he added that “almost mountainous student debt and rock bottom savings rates” still prevented young people from looking further ahead and planning for the future, with short-term commitments taking top priority.
Young people are also unduly optimistic about their retirement prospects, with many believing they will retire at 63 when the current projected state pension age will kick in seven years later. This revelation from Aegon came shortly after the ONS statistics were released.
The company warned that separate ONS figures showed that young couples and families in the UK are still worse off today compared to a decade ago, while recent retirees’ income has risen over the same period. It added that unlike “property rich baby boomers”, young people will not have the safety of property to fall back on with the housing ladder “close to disappearing” for millenials.