With many new graduates now facing a debt in excess of £30,0001, the research shows that tuition fee hikes may be starting to deter prospective university applicants. Nearly one in four young adults aged 18 to 24 are writing off taking on debt to go to university as a pointless waste of time and money (24%), and just over one in four parents, aged 45 to 54, tend to agree (26%).
These findings come following previous research from Engage Mutual Assurance, which revealed that 56% of children under 18 will not be able to rely on their parents to cover their costs of living at university, with 46% of parents expecting their children to cover their tuition costs themselves. Whilst 21% of parents aged 55 to 64 continue to help pay debts for their adult children, the latest research suggests that families may be pulling in the purse strings on helping out with university
As part of its 3GB Campaign2, which seeks to understand different generations’ attitudes towards money and finances, Engage Mutual Assurance asked a sample of 2,200 adults about the financial contributions they make to family members, and which financial sacrifices they consider to be a pointless waste of money and time.
Housing ladder too steep to climb
Despite more than one in three parents standing by to help their children pay the deposit on their first home (36%), many young adults are disheartened by escalating house prices. One in five under 25 year olds consider working their whole life to pay off a mortgage to be a pointless waste of time and money (20%), and are more likely (47%) than older generations (53%) to see the benefits of renting long-term.
Saving for the future
Whilst many are feeling disheartened about the costs of adult life, young people are in fact more likely to recognise the importance of saving than older relatives. The majority of young adults recognise the importance of going without today in order to save for tomorrow (82%), compared to 61% of grandparents. Furthermore, just 9% of childless under 25 year olds consider saving for a pension to be a pointless waste of their money, compared to 20% of grandparents over 50.
Karl Elliott, 3GB Spokesperson for engage Mutual Assurance, commented:
“The financial situation faced by today’s young people is very different from that experienced by their grandparents. Whilst it is encouraging that many young adults recognise the need to save for their future, increasing costs of university and housing mean that young adults will have to think carefully about how much they save and how they invest. Engage Mutual are committed to providing simple and trustworthy products which can help parents to save for their children’s future...”
1 Students leaving university in 2009 will gather around £30,000 worth of debt according to the Daily Telegraph, June 2007: http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/06/13/nstudents113.xml
2 ‘3GB’ is Engage’s Three Generation Britain research index. Research was undertaken by YouGov on behalf of Engage Mutual Assurance between 30 April – 2 May 2007 across a representative GB sample of 2,271
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.