How the cost-of-living crisis is affecting young people’s mental health

 

Much of the focus has been on adults, who have greater financial responsibilities such as maintaining household expenditure. However, the impact of money concerns on young people is now coming to the forefront with much-needed research, echoing our own observations.

The London Institute of Banking & Finance annual research looking at young people’s knowledge and thoughts on education about money found that money related anxiety had increased by 14% (81% in 2022, 67% in 2021). This is also the highest recorded since conducting the survey in 2016, where the results came out at 60%. Looking more broadly about young people’s futures, research by the Prince’s Trust found that two-thirds of young people aged between 16 to 24 have lowered their career aspirations, citing economic uncertainty, financial struggles of parents, and concerns over their own mental wellbeing as the root cause of prioritising money over aspirations. On the spectrum of concerns young people have about their lives, the Children’s Society’s annual Good Childhood Report found that money worries have now overtaken fears about the environment as their main concern.

Whilst delivering our young people’s programmes throughout the UK, we’ve also been seeing an increasing number of young people concerned about money. Through extensive feedback and coproduction sessions with young people, we have captured their insights to continually shape our delivery.

Young people have told us: 

"I’m not able to do things with my friends and find myself not wanting to see them because I feel I can’t afford it - makes me stay at home and isolate myself."

"Being worried about not having enough money stops me from doing things that I like and I often worry about what it will be like in the future."

"It can be difficult comparing myself to others who may have more money than me."

"Hearing about money worries/ problems at home can be stressful and sad and makes me want to help but I don’t know what I can do."

– Young people attending our programmes

Household financial struggles were often cited as a concern, with young people feeling powerless to help or control them. For them, their own sense of self-worth and identity were very much entwined with household finances and the fact that less money often resulted in reduced social activities such as shopping with friends, hobbies, or entertainment. One of our workshops specifically relates to the social pressures young people face and money is increasingly being referenced.

A young person experiencing negative feelings related to money may not feel confident or comfortable talking about it to others. It’s important to recognise the complexity of money matters for a young person, so whilst it might appear on the surface as an anxiety or concern about the lack of money they may have, there are likely to be underlying issues worth exploring in a supportive setting. Young people might be concerned about their future prospects, the possibility or reality of being in debt, the judgement they may receive from peers about their social position, or the impact of withdrawing from unaffordable activities and being rejected or isolated by others. They may also be worried about what is happening at home and feel powerless to help.

Very often, meaningful conversations about money don’t take place until young people become more independent, such as when they start a job, get a debit card, or head off to university. However, with the growing cost of living and high numbers of people experiencing anxiety and other mental health problems due to strained finances, it’s important to ensure young people know they can have open conversations about money. If they have questions, or are experiencing negative feelings in relation to money, they need to know they can approach their parent or carer, or a professional such as a teacher. Along with educating young people about money matters, it is critical to help them explore and understand their emotions and the complex interplay this has with their behaviour towards money.

We have produced this helpful guide on how to explore money matters with young people.

Download our guide

There are huge benefits of starting conversations with young people early, providing them with the tools they need to understand their relationship with money and the impact it can have on their mental health. From our experience of engaging with young people, and those who support them — parents and carers, teachers, sports coaches, youth workers — there is an interest, almost an urgency, to do something about this.

Shortly we will be announcing a new workshop, so be sure to check out our blog in October.