In a survey, over half (52%) of young adults under the age of 35 reported that they had a ‘fairly bad’ or ‘very bad’ understanding of how the whole mortgage process works from start to finish. This is compared to 32% of 35 to 44 year-olds and 25% of 45 to 54 year-olds. Considering that younger cohorts are those most likely to be applying for a mortgage for the first time, this lack of knowledge is concerning.
Worryingly, it also extends to protection insurance, with 53% of under-35s also lacking understanding of different types of insurance products and when in life they might need them.
The survey suggested one important reason for young adults’ low mortgage confidence: financial jargon. In fact, 37% of 18 to 24 year-olds and 33% of the 25 to 34 cohort expressed ‘low’ or ‘very low’ confidence that they would understand the terminology involved in explaining financial concepts.
Research shows that today’s young adults lack understanding across the full spectrum of financial topics – not just mortgages and insurance. With fewer than half of seven to 17 year-olds getting the financial education they need in school or at home2, missing out as children is clearly affecting people in their adult life, too.
And it seems that financial institutions are now cottoning on to this fact, too. In June 2021, Citizens Advice teamed up with popular streaming platform, TikTok, to deliver a financial education series with advice including basic money management, jargon busting and understanding the available options. Last year, another unlikely duo also burst onto the scene when the Bank of England partnered with the Beano to deliver its Money and Me series, a set of 12 lessons introducing primary school children to basic financial concepts.
If you lack understanding about the processes involved, then taking professional advice for your mortgage and protection needs will help give you the confidence you need to make informed decisions about the most suitable products for you.
We’ll use our market expertise to make your mortgage journey as smooth (and jargon-free!) as possible. We’ll also be able to help you understand your protection needs, to bolster your resilience to financial shocks. If you’d like to know more, then please get in touch.
15 November, 2021