Surprisingly, 18-24-year-olds have, on average, a lower outstanding balance of £199 on buy now, pay later (BNPL) products than their elders (compared with £224 for Gen X).
55% of Gen Z believe they are seen by older generations as being “financially irresponsible”, and that there is a lack of understanding about how expensive it is to live these days (51%). However, although many are in the early stages of their careers, 18-24-year-olds on average have an impressive £4,935 in savings, just behind Millennials with £6,053 and Generation X at £6,701.
Gen Z are also surprisingly savvy spenders – they are trying to buy things that are responsibly sourced, second hand or more environmentally friendly (43% 18-24 vs 34% 55+), implying they are not as into throwaway fast fashion as many assume.
The research also found that the majority of Gen Z don’t use credit cards (68%), which unfortunately means they could be missing out on developing credit scores that will help with their future financial goals. This could also cause a generational credit score slump, as young people battle the cost-of-living crisis to build savings. Gen Z are the least aware of their credit score (29%), 18% are unclear about how credit cards work and a further 16% have been advised to avoid credit altogether.
Of those who do have a credit card, 20% still do not know the effects that BNPL schemes have on their credit score, compared to just 10% of those over 55’s. A further 17% of Gen Z have missed a payment too, which leads to credit scores being damaged and potentially hinders this generation’s short-and long-term financial goals.
To help Gen Z manage their buy now, pay later spending with one easy payment while building their credit score, Virgin Money has created Slyce, a way to buy now, and pay better. It combines the flexibility of a BNPL product with the benefits of a regulated credit card and allows customers to manage their money in a way that works for them.
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