Key Takeaways
- Slowing wage growth, rising youth unemployment, and artificial intelligence are all affecting the financial resilience of people aged between 18 and 24.
- Surveys show that many young people are interested in becoming investors, but lack the skills or knowledge to do so, making them more vulnerable to riskier financial behavior.
- Experts say one solution is a more comprehensive programme of practical financial education embedded earlier on in the UK’s National Curriculum.
In his recent “Inside the Manosphere” Netflix documentary, Louis Theroux experimentally puts £500 of his own money into an online “get rich quick” scheme marketed at young men by the influencers he meets—and loses most of it in short order.
Online trading can be tempting but it’s probably the last thing young people need. Life in the real world is hard enough. Youth unemployment is rising and is close to 25% in London. Entry-level jobs in hospitality aren’t as numerous, and the sums required for a house deposit have risen dramatically. Wages are growing at the slowest rate in five years.
For those with student debt, recently the subject of a government intervention, high rates of interest mean monthly repayments barely dent the outstanding balance. Artificial intelligence is on the march. Goldman Sachs analysts say that, globally, around 300 million jobs are exposed to AI, many of them entry-level or graduate.
For those on low incomes, it’s difficult to see how traditional investing in stock markets offer hope and a way out of the financial maze. For those in serious financial difficulty, speculation and trading are attractive—and risky—solutions. On one thing most experts appear to be unanimous: Good quality financial education is needed earlier in children’s lives to deliver a drastic improvement in their financial resilience later.
Do Young People in the UK Want to Invest?
Young people who view traditional investing routes with some suspicion may be surprised to learn that there is significant demand in their own ranks for access.
According to a poll of 2,000 people by industry trade body The Investment Association, the two largest cohorts of people deemed likely to want to invest for the future are members of “Generation Z,” born between 1997 and 2012 (41%) and “millennials” (33%), who were born between 1980 and 1996. Knowledge and understanding fall short, however, with only 22% of respondents aware they could begin investing with less than £50.
“Even a small amount invested on a regular basis can make a significant difference to an individual’s long-term financial well-being,” the Investment Association says.
“If you had invested £50 a month into a typical global equity fund over the last five years it would be worth £3,906 today, over £900 more than had the money been kept in cash in their bank account.” The organization says its example doesn’t account for the effect of inflation, which would further erode the cash pot’s value.
How Auto-Enrollment Makes Young People Investors Without Them Knowing
Plenty of young people are invested in stock markets already via pensions, but don’t know it. A 2012 change that forces employers to “auto-enroll” their employees into pensions has led to a surge in UK workplace pension saving. But contributions are linked to banded earnings, and wage growth is falling nationally.
In November 2025 to January 2026 the annual growth in employees’ average regular earnings excluding bonuses was 3.8%, the lowest level of growth since the same period September to November 2020. The latest government analysis on contributions shows that people aged between 22 and 25 are “slightly more likely” to be saving at the minimum auto-enrollment level of 8% of band earnings than their older peers. (The trigger for auto-enrollment is currently earnings of £10,000 a year.)
While retirement saving has been broadly improved by the policy, engagement is also low. Jonathan Watts-Lay, director at employee benefits firm Wealth at Work, says there is a “general lack of pension understanding and engagement.” The company’s research suggests 21% of employees have no idea how much their pension is worth. Almost a quarter of workers don’t know how much they need to save for a comfortable retirement. Many young people will be among them.
For the most recent tax year, the UK government estimates that around £90 billion will have been invested in private pensions, mostly driven by auto-enrollment.
Why Debt and the Cost of Living Are Holding Young People Back From Investing
Pensions aside, money problems are holding many young people back. In the Financial Conduct Authority’s 2024 Financial Lives Survey, 18- to 24-year-olds ranked highly among those more likely to have low confidence managing their money. This demographic is just behind the unemployed and those on low incomes, which are often overlapping groups.
Debt is a problem. Debt management charity StepChange says that around a quarter of 18- to 24-year-olds are “in some form of financial difficulty.” Mapped against ONS population data, the problem likely affects 1.3 million young adults, it says.
According to the Money & Pensions Service, a government-backed financial guidance provider, more than a third (37%) of young people have taken out loans via credit cards, overdrafts, or via other means. When student loans and mortgages are included, the figure increases to 67%. On average, 18- to 24-year-olds owe £2,989, excluding student loans and mortgages.
Being unemployed is the most common reason cited for young people to be in debt: One-in-five StepChange service users aged between 18 and 24 cited unemployment or redundancy as their primary reason for being in problem debt. The unemployment rate for young people for November 2025 to January 2026 was 16%, up from 14.5% from the year before, and this figure is even higher in London. For policymakers, the impact of “NEETS”—those who are not in education, employment, or training—on economic growth, savings rates, and social cohesion, looms large.
A Young Investor’s Story: Selling Stocks to Cover Debt
For Robert Butler (name changed), a 24-year-old from the West Midlands, such statistics will ring familiar. A photographer with a passion for motorbikes and mechanical engineering, Butler lost his job as a leisure center manager last year.
With bills stacking up and debts to repay, he says he had no choice but to liquidate the stock holdings he had built up. They included defense stocks that were benefiting from renewed fears of global conflict.
Today, he’s grateful to be back in work, but the work isn’t exactly fulfilling. The work is “fairly stable, but not quite as stable as I’d like it to be.”
“When I lost my previous job, everything went sideways,” he says.
“Before I had to liquidate my shares, I was doing quite well. Rolls-Royce was doing pretty good. Lockheed, Raytheon, Boeing, Rheinmetall. A lot of them were doing well.”
Butler still lives with his parents. He has debts to pay off in the form of a finance agreement for his motorbike, which he uses to commute. Other debts eat into his take-home pay, and he makes a monthly contribution to his parents’ mortgage. The money left over for investing is limited. He’s reinvested, albeit in a riskier way.
In a bid to make more money, Butler invested in contracts for difference or CFDs, a method of speculating on asset class movements via leverage that the FCA says carries a “considerable risk of substantial losses.”
“My main motivation was it’s that bit of extra cash to help toward bills and fuel. Obviously with the oil price going up, fuel prices have gone up too,” he says.
Experts say this is a risky way to manage your finances, especially as modest “upfront” investments may be initially appealing.
“Smaller entry amounts can attract younger investors with less money available,” says Nicolò Bragazza, associate portfolio manager at Morningstar Wealth.
But he adds that leveraged instruments such as CFDs may be more risky than they look at first glance.
“Although some protections exist within regulated retail accounts, the risk of quickly losing all your money remains.”
Will Financial Education Reforms Help Young People Invest?
For now, Butler is getting by. But he wishes he had been taught more about money and investing when he was at school. Officially, financial education is part of the UK’s national curriculum—lumped in with citizenship classes delivered to 11-to-16 year-olds. But it is not currently a stand-alone subject like maths or physical education, is not compulsory, and can vary depending on the school.
A 2025 review of the subject means that in future the subject will be taught in primary schools, and include more practical real-life examples for mortgages, budgeting, and compound interest. How to spot and avoid financial scams, a concern of the UK regulator, will also receive greater coverage.
“Financial education must be compulsory in all secondary schools, not just those that follow the curriculum,” says a manifesto published by UK fintech GoHenry, the banking app for children and teenagers. It now wants secondary-level education to include “practical elements, not just theoretical lessons.”
For Butler, that’s welcome news. But it won’t turn back the clock, and it’s a long way from ensuring young people in need of targeted support get the insight they need.
“[Better financial education] will help a lot of young people control their money and keep them in better financial health when they enter the workplace,” he says.
“I’m still fairly rubbish with my personal finances now. I’m learning how to deal with it but hard mistakes have been made.”
And those who manage money on behalf of clients agree.
“Education is key, especially for non-professional investors, as they need to be aware that the potential for faster and larger gains often entails significantly larger risks,” Morningstar’s Bragazza says.
