For twentysomethings in the 2020s, a unique combination of financial pressures is having an impact on their financial stability, confidence, and ability to plan for the long-term.

Sam Clark
Customer Affordability & Data Director
08 May 2024
4 min read

Our twenties are a time of major life changes. From moving out of home and thinking about getting our first place, taking the first steps in our careers, graduating from university or even starting a family, it’s a period full of potential and opportunity. It’s exciting, but it can also be a challenging and stressful time, because with these changes come new financial responsibilities. For a lot of young people, they’re having to make important financial decisions for the first time. 

Specifically, for twentysomethings in the 2020s, a unique combination of financial pressures is having an impact on their financial stability, confidence, and ability to plan for the long-term.

A crisis of financial confidence

People who were in their twenties at the start of the decade became financially independent during a period of unprecedented economic and social turmoil. The Covid-19 pandemic and rising cost of living affected the jobs market and squeezed disposable incomes. This has happened at a time when housing is becoming less affordable and young people are being increasingly targeted by fraudsters. We shouldn’t be surprised that the ONS found last year that people aged 25-34 are the most likely age group to be financially vulnerable.

Faced with taking real financial decisions for the first time, twentysomethings are low on confidence and often not equipped to make the decisions that will affect them for the long-term. We’re highlighting the everyday challenges young people are facing with their finances and sharing some straightforward steps for to help with money worries. 

Research from Lloyds Bank has found that only a third (37%) of 25-34-year-olds say they are very confident that they are capable of making the right financial decisions for them or their family. While a quarter (25%) of 25-34-year-olds admit they never really know what they are looking for when choosing financial products – more than any other age group.

Many also admit to making bad financial decisions; the research found that almost half of people in younger age groups rarely, if ever, check that the choices they’ve made are still the right ones. 

Meanwhile, over a third (35%) of 25-34 year olds admit to being more cautious with making financial decisions because of mistakes they’ve made in the past. 

This data paints a concerning picture of the financial confidence of people in their 20s, with this group having an increased vulnerability to financial fraud that starts on social media because of their heightened use of social platforms compared to older generations. 

“We have a responsibility to do what we can to help younger people navigate the complicated financial decisions they need to make.”

Reaching young people with financial information

We have a responsibility to do what we can to help younger people navigate the complicated financial decisions they need to make. At Lloyds Banking Group, we’re in a position to provide people with tools and advice that can help them make better decisions. 

There’s sometimes an assumption that younger people don’t want to engage with their bank, beyond essential financial transactions. That they either aren’t interested in listening to advice or they only want to hear from people of their own age.

When asked however, as we saw in the recent Lloyds Bank survey, we find these assumptions simply aren’t true. Yes, younger people like to get information through social channels, but around half of people in this age group actually say they would like a more involved relationship with their bank; more than people in older age groups. 

They are also more likely to seek out financial advice and information than older people and get it from a wider range of sources, including their bank.  

“Taking small, manageable, steps now is a good way to plan for the long-term at a time when taking bigger steps can be more difficult."

Providing the right financial tools

At Lloyds Banking Group, we provide a host of advice and services that can help people to make the right financial decisions for them, and take those small steps that will help them plan for the long-term. 

Our ‘Your Credit Score’ tool across our apps gives customers access to their score with personalised guidance on what steps they can take to help improve it. And with access to their full credit report, customers can see what may be impacting their score and raise a dispute if there’s anything in there that doesn’t look right.

’Save the Change’ allows customers to put small amounts of money aside now, to help them save for the future. We‘ve created a savings calculator so people can see what the long-term can look like, and an emergencies fund calculator that estimates what they should be aiming to set aside in case they need funds urgently.

For people who are really struggling; we offer payment breaks and debt consolidation to help customers manage debt and make informed financial decisions. But we often find customers come to us too late, or not at all. 

Taking small, manageable, steps now is a good way to plan for the long-term at a time when taking bigger steps can be more difficult. The impact of consistent, small positive actions can be transformative. So we’re publishing our own set of STEPS that are a good start for anyone, but especially younger people, who want to build financial confidence and set a good financial platform for the future:

  • Set yourself a budget – It’s important to have a full picture of your incomings and outgoings, so you can see where you might need to make adjustments. Our budget calculator might help you make extra savings each month, reduce your debts and prepare for the future.
  • Tell us if you have money worries – If customers are worried about paying bills or keeping up with money borrowed, the sooner people tell us, the more we will be able to help. Here’s how to reach us or access other sources of free independent advice.
  • Educate yourself about scams – Understanding the sophisticated techniques that fraudsters use is the best way to protect yourself. Our website has examples of different types of scams.
  • Plan for your long-term financial future – Good financial habits, such as paying off credit cards every month and understanding your credit score, will set people up for the long-term. Customers can access a personalised credit report which includes advice on how to improve the score from Your Credit Score.
  • Save what you can afford – Putting aside even a small amount now will help in the future, Lloyds Bank Save the Change helps turn small change into bigger savings.

It is reassuring that 25–34 year-olds want more financial advice and information and there is a clear role for the banking sector, along with government and other bodies in making this more accessible and we’re working on getting these STEPS out to the places that younger people go for information; through social media and influencers and in the media that younger people read. That’s why we’re working with Dr Alex George, an influencer and podcaster focused on mental fitness, to get this message out to his millions of followers. 

Faced with the unprecedented challenges the 2020s have thrown at younger people it’s no wonder that many are low on financial confidence. It can be hard to plan for a future that looks a long-way off, but small, manageable, steps to improve their credit score, protect themselves from fraud, or put money aside, can create a solid financial platform for the future. 

Sam Clark
About the author Sam Clark

Customer Affordability & Data Director

Sam joined Lloyds Banking Group in 2004 as a Graduate Management Trainee. He has worked in Business Banking, Commercial, and for the past ten years in the Retail Bank, holding several roles related to pricing, product management, and covering Homes, Savings, and Cards.

In July 2022, Sam transitioned to a new role in Consumer Lending, aiming to reimagine how the bank assesses and manages customer affordability for more digital-centric journeys. His team is responsible for developing and building ‘Your Credit Score,’ an online tool that provides customers with information about their affordability. Currently, Your Credit Score has over 9.5 million registered users, with more than 6 million customers registered for its push alerts. 

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