By Daniel Hunter
New research reveals that working 18-27 year-olds, termed 'Profreshionals', do not believe they will be financially independent until they are 25.
This is a staggering 7 years after becoming an adult, 3-4 years after finishing a degree for many and 7 years later than their parents’ generation claim they were able to support themselves financially.
The study, carried out by Legal & General’s home insurance business also found that 15% of all ‘Profreshionals’ who are not yet financially independent, don’t anticipate they will be until at least their 30s.
‘Profreshionals’ believe they need to earn just over £18,000 per year to be financially independent. This salary level is just under the average annual salary of those surveyed which was £19,600 so although it would appear as though this group as a whole do have their financial independence, they may only just be scraping by.
Over a third, (36%) are earning less money than they thought they would in their current job and despite the fact that more than half (52%) of ‘Profreshionals’ place more priority on earning a regular income than job satisfaction and 43% work in a job that they don’t enjoy.
It seems that parents of these 18-27 year olds feel differently, though, as more than three quarters (76%) said that they said that it is important for their child/children to find their dream job, even if it is low paid.
A fifth of ‘Profreshionals’, (20%) admit they still rely on handouts from parents and or family and are receiving an average of £170 per month: the equivalent of £2,040 per year.
Almost half, (48%) of parents who provide financial support say that providing help to their child/children does put stress on their own finances: 41% admitted that they had not been able to go on holiday as often as they would like and 27% said that they will have to compromise their retirement as a result.
Over half, (55%) of ‘Profreshionals’ are not concerned that they will lose their job, which maybe explains why only 3% said that they have some insurance cover in place to help protect their income should this happen.
Over two fifths of parents, (43%) worry that their child/children do not have enough savings to support themselves if they lost their job and almost half, (46%) worry that their child/children will never be able to afford to get on the property ladder, but nearly a fifth (16%) enjoying the benefit from work of being able to own their own home.
“Our research found that only one in five, (20%) of 'Profreshionals' could afford to replace half their belongings immediately if they experienced a fire or flood. That is despite 70% of the parents we surveyed saying that they had said to their children that it was important that they have contents insurance cover,” said Mark Holweger, Director for Legal & General's general insurance business.
“It's important to enjoy the upsides of starting working life and earning money for the first time but it's also important to understand the benefit of having adequate insurance cover in place.”
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