Trend Alert from the Student Beans insights agency, Voxburner, introduces you to the latest trends that are impacting the daily lives of 16-24s.
Amid the current cost of living crisis, there’s more worrying news about the state of Gen Z’s finances. According to data sourced via a Freedom of Information request by finance app W1TTY, 16- to 24-year-olds in the UK were 205% more likely to seek debt advice in 2021 than 2016. This is a staggering increase in just five years.
During that time, of course, young people have seen the impact of COVID-19, with many losing their jobs, struggling to find work, or lacking financial support from family. Industries like retail, leisure and food service, which were forced to close during the lockdowns, employ a large number of young people. For people starting out in their first job or earning money to support their studies, even a short-term decrease in income can lead them to turn to loans or credit cards as they may feel there is no other option.
The pandemic isn’t the only factor that has driven more young people to get into debt. The spotlight should also be shone on a retail industry that makes them feel pressure to own the latest products in order to fit in or impress their peers, from the newest smartphone to the hot fashion trends. While this pressure is nothing new, social media has made it easier than ever to compare yourself to others. Our upcoming UK Youth Trends Report will reveal that 78% of 16-24s feel social media negatively impacts their mental health, and comparison culture is a big part of this.
In addition to social media, another change that could be responsible for the increase in youth debt is the rise of the ‘buy now, pay later’ industry. In research we conducted for our sister company Student Beans last November, we found that 42% of Gen Z have used BNPL at least once, and 53% thought these services were dangerous as they encourage young people to spend more than they can afford. This speaks for itself: if Gen Z themselves are concerned about how the BNPL industry is affecting them, it’s time for BNPL providers and the brands who partner with them to consider what they can do to prevent the youth debt crisis getting even worse.