The lack of financial education among young people is causing them to fall into the Standard Variable Tariff trap, new research from Comparethemarket reveals.
The younger generation of bill payers is more likely to be on a Standard Variable Tariff, the research shows.
Additionally, only 26% of 18-24-year olds know that you are automatically moved onto a Standard Variable Tariff when your current fixed energy contract expires, 7% less than adults in the UK.
General knowledge regarding the cost of energy usage and monthly charges is also low among young people, as two in five are not able to say how much they pay monthly and nine in ten how much they pay per kilowatt. This is, however, something that the majority of bill payers are unable to understand.
The research also shows that missing bill payments are more likely amongst young people, with nearly twice as many for 18-24-year olds, when compared to the average.
“Making the right financial decisions from an early age can help set yourself up for a lifetime. For a young adult setting out on their own for the first time, taking on the responsibility of paying bills can be a daunting task,” Peter Earl, head of energy at comparethemarket.com, commented in a statement.
“It’s crucial to take a little time out when it comes to choosing the right tariff for your circumstances. More often than not it makes financial sense to lock into a fixed rate tariff, which could save you hundreds of pounds a year on your energy bill.”