A new report has called on banks, policymakers and financial providers to overhaul how they design products, services and education for young people.
The report from the Compassion in Financial Services Hub at Edinburgh Futures Institute in collaboration with Young Scot has gathered evidence from 300 young people aged 11-24 and interviews with 14 financial sector professionals.
It found that children and teenagers are managing money digitally earlier than ever before and encounter spending, saving and financial risk first through gaming environments, which are lightly regulated.
Parents remain the main source of financial guidance for younger children, but older teens are increasingly turning to online sources and social media, even though they often do not trust what they find. School-based financial education was found to be patchy and often impractical, while traditional banks feel distant and irrelevant, although many young people feel comfortable using banking apps, suggesting potential for well-designed digital support.
Young people said they wanted services aligned with real milestones such as first jobs, student loans and rent; financial products that recognise inequality and uncertainty; plainer language and strong protections against scams and overspending.
To achieve this, the report found younger people want to be actively involved in shaping the decisions that affect their financial futures. This means regulators and industry committing to ongoing, meaningful co-design with young people when developing financial products, experience and policies.
The report sets out a number of practical recommendations for policymakers and educators, as well as financial services professionals.
As an example, the report says policymakers could rethink age thresholds so that products reflect the age at which young people already use digital money, as well as support real-world money skills beyond the classroom and improve safety and guidance around money in gaming and online platforms.
Additionally, the financial services sector could develop financial pathways that grow with young people and are relevant to the real economic pressures they face, as well as combine high-quality digital access with meaningful human support.
Professor Liz Grant, assistant principal for global health at the University of Edinburgh and co-director at the Compassion in Financial Services Hub, said: “Working with the Young Scot organisation, the report amplifies the voices of those whose voices have not been heard enough in our financial society. The in-depth challenging research conducted by, with and for young people has produced a set of nine actionable recommendations which would, according to young people, immeasurably improve their current and future financial experiences.”
John Loughton, CEO of Young Scot, added: “Young people are navigating an increasingly complex financial world, yet too often the systems and support around them haven’t kept pace with how they live, learn and manage money today. By working directly with young people, we’ve been able to highlight not only the challenges they face but the practical changes needed to better support them.
“Financial services have a huge opportunity here to become more inclusive, more transparent and more relevant to young people’s real lives and experiences. Let’s all collectively strive to meet the challenge of this generation’s financial hopes and expectations.”
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