A new online tool to help young people achieve financial goals, such as saving for a deposit on their first home, has been launched by Experian.
The Savings Tool will help savers set realistic amounts, which it breaks down into monthly, weekly and daily goals. It also calculates the time it will take to reach their target.
It has been launched as Experian uncovered evidence more than a quarter of 21 to 35 year olds still lived at home and were saving an average of £205 a month by staying with their parents.
It revealed the most popular savings aim amongst people of this generation was buying a home with 34% of those questioned admitting they were putting money away to get onto the housing ladder.
But it also observed that many young people were relying on their parents to cover the costs of essentials such as groceries, car expenses, rent and mortgage payments.
While this was helping them financially, it might mean they were not building up a strong credit profile.
James Jones, head of consumer affairs at Experian, said: “This has implications for both the youngsters’ and the parents’ financial futures, particularly if the parents’ finances become squeezed.
“Whilst receiving help from parents is perhaps necessary for many, I urge young people to also be conscious of building a positive credit profile. For example, remaining on track for repayments such as credit card, household bills and mobile phone contracts.
“Our new savings tool helps young people quickly and easily assess their financial situation by understanding how much they can realistically save on a daily, weekly or monthly basis to achieve their financial goals.”
Experian’s tips for savings success for prospective first-time buyers
Tip 1: Consider paying off debt before you start a savings pot. This may help you reduce the amount of interest you pay and improve your credit score. Your score reflects your ability to borrow money at the best rates – you can check your Experian Credit Score for free.
Tip 2: Balance your short-term goals (such as a holiday or new furniture) with your long-term goals (like a house deposit or pension). Even if you don’t have a savings goal at the moment, it never hurts to have a rainy-day fund.
Tip 3: Consider setting up a direct debit to put money into a savings account automatically each month, ideally just after payday.
Tip 4: Research the most appropriate savings account for your needs (for example instant access, cash ISA, regular saver) and shop around for the best returns. The right account for you may depend on what you’re saving for, how long you’ll be saving for, and how much you can put away each month.
