The news over the past few weeks has been dominated by concerns about a drop in the housing market, a tightening in the availability of credit, the huge hike in energy costs and the continuing moral panic about over-indebtedness.
I have found it interesting in my role as Youth Policy Adviser at the FSA to observe the differing reactions of front line workers and managers to our offer of free training in Financial Capability for youth work intermediaries. For some, the penny drops ('scuze the pun!) immediately. An ability to manage your money is a key life skill, it is critical in improving economic well-being yet it is an area that is often neglected in work with young people. For others, it is not a high priority, working with young people with chaotic lives, why would they be interested in being able to manage their money better?
A while ago I visited a young tenants project where they were doing some work on managing money. I asked the manager if his workers had had any training. "No" says he, "So how do they deliver the sessions?" "On the basis of their own experience" - which left me reflecting on whether he would have asked them to deliver a sexual health session on the basis of their own experience........I don't think so!
Whilst for young people with chaotic lives money may not be the most important issue they are having to deal with, it often has an impact. For example, s/he may have a drug habit that has lead to them getting into debt. S/he may have been thrown out of home and is not only having to deal with the emotional and physical upheaval, but also with trying to pay bills and make ends meet. Mental health problems can often lead to money problems and vice versa. So, I would argue, beginning to take control of their money can help a young person develop the skills to take control over other areas of their life.
In England, economic wellbeing is a desired outcome for all young people and yet all too often it is interpreted as being just about getting a job. It is far more. Many young people who get a job struggle to keep it if they are unable to manage their money. And whilst the impact on young people of the credit crunch may not be as high as on their parents, for those who are not in education employment or training, (NEET) any debt, with little resource to repay it, can be completely crushing. Rainer recently published research showing that 77% of young people have been in debt by the age of 21. To quote
"For young people reliant on benefits, long delays and the complexities of the system were a major cause of debt. Rainer found that these debts are leading to crisis point for 1 in 5 young people who, after paying bills and debt repayments, are left £50 a month or less to cover food and other expenses. 1 in 10 young people are left with nothing.
It is those young people who are vulnerable in other areas of their lives who are hit the hardest. 85% of homeless young people are in debt and Rainer's research showed that the young people it supported are left with an average of just five pounds per week.
Rainer Chief Executive Joyce Moseley said:
"Young people tell us that being in debt is now just part of the norm, but it can quickly become a millstone around their neck. In addition to the stress it can cause, there is strong evidence that debt can prevent young people from living independently or taking part in education or even eating healthily."
Our training, covering banking, budgeting, credit and debt, as well as ideas for embedding financial capability into practice, is free to intermediaries working across the UK with the NEET group.
For more information visit
Young People and Money.