On average, young people believe they will walk into a job after full-time education that has a starting salary of £27,000 when in reality it is nearer £20,000.
The latest figures from Equifax reveal that a third of young people aged 14-16 have no idea what career they want to pursue when they leave full-time education. And, for those that do know what sort of job they want to do, 72% admit to being clueless as to the typical wage it would offer.
As part of its ongoing commitment to help young people grow up with the life skills, knowledge and confidence they need to successfully manage money, Equifax has teamed up with Young Enterprise to take a deeper look into how young people feel about money and their career aspirations.
Although young people may not know exactly what they want to do when they are older, they are certainly aiming high in the salary stakes. On average, those surveyed believe they’d walk into a job after full-time education that pays £27,000 per annum as a starting salary. Those in London believe they will earn an average of £40,000 in their first year of employment. However, with ONS data showing that the average starting salary is likely to be around £20,000, some young people may be in for a shock when they join the working world.
This naivety amongst the younger generation is further shown when looking at how much they think life essentials cost, including rent, mortgages and bills. On average, the 14-16-year-olds who responded to the Equifax survey believed the cost would be around £636.21 per month. In reality, the last time the ONS reported on the cost of living, it found that the average weekly household spends remained level at £528.90 in the financial year ending 2016.
“Our findings suggest that there is still a little way to go before youngsters fully understand the type of financial pressures that they may face when they leave full-time education,” said Lisa Hardstaff, credit information expert at Equifax. “Whilst it is positive to see that they are aiming high with their salary expectations, the reality of the cost of living may come as a bit of a shock. The best way to learn about finances and money management is to start early, so it is important for young people to make the most of the opportunities both in school and at home.
“One of the biggest misconceptions that we found from the research was that young people do not necessarily appreciate the full cost of living on a monthly basis, and how this can take a big chunk out of their wages. This combined with that fact that youngsters are potentially overestimating how much they will earn, demonstrates the need for broader awareness about the cost of the things they want – and how they might be financed. Parents and guardians can help with this understanding, and use things such as online budget planners and finance apps as examples to give their children a real sense of what life might be like once they have left full-time education.”
Russell Winnard, Head of Educator Facing Programme and Services at Young Enterprise added: “It is important to have the right foundations from an early age to help young people manage their money well throughout their life. This latest Equifax research demonstrates exactly how important that is, so that young people can start their working lives with the right attitude to be able to manage their finances in the best way possible.”
To help parents keep control of their budget, Equifax has added an interactive Equifax Budget Planner to the tools on its website.
 Research conducted by Censuswide. 1003 8-16-year-olds (501 8-13-year-olds and 502 14-16-year-olds.) 18.09.2018-21.09.2018