Financial scams can have serious consequences for young people, from financial loss to identity theft. Our 2023 Young Person's Money Index (YPMI) revealed some concerning statistics about the prevalence of financial scams targeting young people in the UK, with more than half of respondents (53%) experiencing some kind of scam or fraud on a daily basis.
We explore why young people might be vulnerable to financial scams and how financial education can help.
What is a financial scam?
Financial scams come in many forms, including phishing emails or texts, authorised push payment fraud, identity theft and more. Often, these scams use psychological tricks to deceive victims into giving away their personal information or money.
According to our 2023 YPMI:
- 29% of young people received a fraudulent email, phone call, or text asking for their bank details
- 24% received a fraudulent phone call, text or email from someone claiming to be from HMRC or the tax office
- 10% have been asked for their PIN number.
The Local Government Association found that over half of the victims of scams reported in the UK were people aged 16-34. This could be due to them using technology and social media more regularly than older age groups.
According to our 2023 YPMI, 89% of young people use digital banking over other banking services. As such, there is an evident need for greater education and awareness around financial scams –particularly in the online space.
Financial education can protect against financial scams
A lack of financial education could be contributing to young people being vulnerable to financial scams. With 82% wanting more financial education in schools and 19% teaching themselves, they may not have the knowledge they need to correctly identify and avoid them.
Young people may also be more likely to fall for a scam if they think it is coming from a reliable source, like their bank. One way to prevent this is by banks and financial services organisations providing clear and concise information about how their customers can identify and report financial scams, and also making sure their customers understand their security measures to check that any messages are genuine.
Financial education has a key role to play in helping young people make better financial choices and give them greater ability to spot scams and potential fraud.
By providing young people with the knowledge and tools they need to make informed financial decisions and protect themselves from scams, we can promote greater financial inclusion and help young people to achieve their financial goals.
Find out more about our financial education qualifications
Find out more about our Young Persons’ Money Index