Young people are leaving themselves financially exposed

Nearly half of 18-24-year-olds are risking their financial wellbeing according to a recent survey.

Conducted for National Conversation Week 2019, the YouGov research of 1,023 British adults revealed that 47 per cent of young people aged 18-24 admit to not being insured from a list of 14 popular types of insurance. Perhaps not unsurprisingly, critical illness (0 per cent), personal accident (1 per cent) and personal mortgage protection (3 per cent), ranked particularly low on their list of protection priorities. However, worryingly young people are leaving themselves unprotected when it comes to common everyday events, such as damage or loss of cars, mobile phones and problems when travelling.

Most 18-24-year-olds surveyed believe that products, including life insurance, mortgage protection and income protection, are not relevant to them and only apply when you hit 25 and over.

James Loder, is Proposition Director at Paymentshield – the leading provider of general insurance to the mortgage intermediary market which is a key supporter of the national awareness week. He said: “Insurance is often perceived as something that’s only important when you get older but that’s not the case. As soon as you buy an expensive item such as a phone or car, start a job or move into a property you have assets that would be expensive to replace and are therefore important to protect.

“What is worrying is that young people are leaving themselves significantly exposed in the event of damage which could cause them serious financial problems in the present which could also have significant impact on their long-term financial situation. Given that young people are generally less experienced when it comes to finances I would strongly encourage them to seek some professional advice to set them up for their future,”

The survey found that a quarter of respondents in London also fail to have any form of insurance, with 21 per cent of people in the North West and 19 per cent in Scotland choosing not to purchase some of the most common insurance products on the market.

Mike McGrail, Senior Product Manager, at Swinton Insurance, a UK insurance broker offering car, home and bike cover amongst other products, said: “As worrying as these findings are, they’re not all that surprising. Financial products like insurance just aren’t at the top of people’s priorities and we don’t devote adequate time to them – even when it’s the law, like with car insurance.

“We’ve found that almost a third of 18 – 24-year olds have no idea what their car insurance policy covers them for and a quarter wouldn’t take it out if it wasn’t a legal requirement. Some young motorists even went as far as admitting that they place more importance on protecting their mobile phone than their car.

“Although many may think insurance is a less important element of car ownership, the simplest misunderstanding can leave drivers at risk of financial loss and potentially not being covered should they make a claim. That’s why we are on hand to help drivers understand their car or home insurance policy and offer guidance on what to do if they need to make a claim, whether they are a Swinton customer or not.”

National Conversation Week 2019, which runs from 18 to 24 March, is encouraging everyone in the UK to try and be more open when it comes to their finances.

Paymentshield, Switon and the other National Conversation Week partners, want to help people learn how they can manage their finances in a better way, whilst highlighting how professionals can help at each financial stage in life.