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Media centre /
Press releaseTHE ‘FRIEND EFFECT’ THREATENING YOUNG BRITS’ FINANCIAL HEALTH13 December 2006
Nearly half (44%) of young Britons aged 16 to 24 say their friends put pressure on them to keep spending even when they have run out of money, according to the latest Quarterly Savings Survey (QSS) published today by National Savings and Investments (NS&I). Overspending by this generation has damaging implications both for consumer debt and future savings habits and threatens their long term financial health, warns NS&I. Do friends influence you to overspend?
The cost of over-spendingDax Harkins, senior savings strategist for NS&I, said: “Friends influence all of us in what we like to do, but it is a grave concern if young people are being persuaded by their peers to spend money they simply don’t have. If they build up debt from overspending when they are young they will have nothing left to put away in savings for their future. At this young age, when they are just beginning to earn a salary, manage finances and pay off student debts, it is vital to start good savings habits, rather than going into the red just to be part of the in-crowd.” The power of the ‘friend effect’ Nearly a quarter (24%) of impressionable 16 to 24 year-olds think friends should have an influence on whether people spend, compared to just 16% of all those surveyed. But when it comes to savings habits, just one in 10 (11%) of 16 to 24 year-olds say they are influenced by their friends as to whether they have a savings account. Who should influence savings?The NS&I Quarterly Savings Survey also shows the biggest influencers on savings behaviour should be:
Despite the threat peer pressure poses to the young and their financial habits, the survey does hold a note of encouragement. Even though they are under pressure from friends to overspend, a quarter (25%) of 16 to 24 year-olds said they save even if their friends don’t, compared to just over one in 10 (13%) of all those surveyed. QUARTERLY SAVINGS SURVEY: OTHER FINDINGSRegular savings and aspirations fall
Improvements in saving since 2005
Trends ‘a cause for concern’Dax Harkins, continues: “The positive news is that the number of regular savers has risen quite significantly since last year. And even though those who save regularly are not able to put aside as much per month, the overall total amount going into savings has increased. But what is worrying is that non-savers are finding increased demands on their finances are stopping them from putting money away and younger people are succumbing to peer pressure to overspend. Even if the purse strings are being tightened it is always sensible to put a little aside, not only for the future but for any unexpected financial shocks that may occur. ENDS Notes to Editors For a PDF of NS&I’s Quarterly Savings Survey click here or for a hard copy or further information on the statistics supplied in this release please contact the NS&I media team. A regional trend breakdown is also available. The survey of peoples’ savings habits and likelihood to save in the future was carried out by TNS Phonebus among 3,042 GB adults aged 16+ between 1 September and 5 November 2006. [1] Population of Great Britain aged 16 and over calculated using ONS 2005 figures. Dax Harkins is available for interview and high-resolution photographs can be supplied. Contact the media team to arrange an interview or request photographs by e-mail.
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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