A new report from Virgin Money reveals that Generation Z cares the most about their financial security and worries most about how the current economic climate will impact on their goals (70%). 18-24-year-olds have, on average, a lower outstanding balance of £199 on buy now, pay later products than their elders.
The findings come from research commissioned by Virgin Money with 5,000 consumers in the UK across different age groups, as it launches Virgin Money Slyce.
18-24-year-olds on average have £4,935 in savings, just behind Millennials with £6,053 and Generation X at £6,701.
More than half of Gen Z selected owning a home as a key long-term goal, along with saving for their current or future family and having enough money to retire.
Almost seven in 10 Gen Z’ers don’t use credit cards at all. Gen Z are also the least aware of their credit score and 18% are unclear about how credit cards work.
Virgin Money Slyce, created in partnership with Mastercard, combines the flexibility of a buy now, pay later product with the benefits of a regulated credit card.
Jayne Sutherland, Head of Commercial Strategy and Propositions at Virgin Money, said: “There are too many buy now, pay later products which give young people a headache that won’t go away. We know that Gen Z deserve credit that’s simple, manageable and rewarding, helping to boost their credit score as they battle the cost-of-living crisis to build for the future."
Mr MoneyJar’s Timi Merriman-Johnson has partnered with Virgin Money to reshape perceptions about younger people’s financial literacy and get more people to buy now, pay better.
Timi said: “Debt and credit card debt in particular, seems to have a lot of shame and misinformation attached to it, with many people opting for what they think is a safer option by buying now, paying later on purchases.
“As a Millennial, I’m aware of the incorrect perceptions of younger generations and our financial understanding. Although most of these perceptions are wrong, the assumption that BNPL is safer or better for our credit scores isn’t really correct. Debt is a great tool when used the right way, not only can it support building your credit score to help secure loans and mortgages, it can also be a better way of managing your finances – particularly when you are purchasing items you already were planning to purchase."
