A-levels done. Next up? Money worries

This time next year, I’ll be one of the many parents across the country nervously waiting for that all-important A-level results envelope to be opened. I won’t be an interested onlooker, it’ll be my child standing at the edge of adulthood, ready to take their next step into the world.

And while these young Gen Zers (born 1997-2012) might be more concerned right now about getting the grades they need for university or the job they want, that’s not all they’re worried about. In a recent survey of 20-38-year-olds by Fidelity¹, it showed that they’re seemingly carrying the weight of a world on their shoulders that feels increasingly uncertain - especially when it comes to money.

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What are young adults worrying about right now?

The numbers paint a stark picture. Two thirds (64%) of 20 to 38-year-olds in the UK say the cost of living and inflation are causing them stress - more than any other factor. Another 59% are concerned about the state of the economy. And 51% point to global political events as a major source of anxiety. Nearly half (47%) are worried about how they’ll reach their long-term financial goals, and 43% already feel pressure about career progression.

This lack of confidence isn’t just disconcerting for them, it’s upsetting for their parents too (they say you’re only as happy as your unhappiest child).

So, what can we do to help them face their future with more financial confidence?

• Read: 7 investing rules of thumb

Now’s the time to get into some good financial habits

The good news is while Gen Z might be facing a lot, they also have one incredible advantage… time. With the right habits and guidance, they can take control early, build confidence, and make decisions now that their future selves will thank them for.

Our research shows that both being financially knowledgeable and building the confidence to apply that knowledge are cornerstones of positive financial wellness outcomes. The earlier people start engaging with their finances, the more opportunity they have to build that confidence².

And as a parent, that’s exactly what I want for my child - not just good grades, but real-life readiness. And if you’re in the same boat, here are some lessons we can pass on, so our children can enter adulthood prepared. Because life’s complicated enough as it is!

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Here's 5 financial life lessons for your teen.

1. Talk about money - starting with the basics

We can be terribly British when it comes to money. It’s time we got over it. It’s not crass to talk about the ‘m’ word. I’d even go so far as to say that - as parents / or parent figures - it’s downright irresponsible not to. Normalising money conversations allows for questions, reflection and learning from mistakes.

I’ve certainly talked to my children about money over the years. When they were really young it was about saving their pocket money for something they really wanted, rather than spending it as soon as they got it.

I’ve chatted to them about their Junior ISAs and why we squirrel money away for them - explaining that this money is invested, which means they own little pieces of many companies all over the world (at the time I asked them what they would invest in… their answer? Disney and Amazon, if you’re interested - aged 8 and 11). And I’ve even gone as far to explain that we only own part of our house (their eyes grew wide at that one), and about what having a mortgage means.

As for my oldest, when she heads off to university, I’ll sit her down and instil in her the importance of getting a clear view of her money. What’s coming in, what’s going out, and where it’s going. Budgeting might not sound exciting, but it builds confidence and control.

I think it’s healthy that they know about this real-life stuff, as it helps set a strong foundation before they’re fully in control. It could come as a real shock to the system otherwise.

2. Start saving - the tax-efficient way

My child is lucky. She’ll get handed a regular stocks and shares ISA once her Junior ISA matures when she turns 18.

• Read - Milestones and money: teaching your teen about their Junior ISA

But if she didn’t already have an ISA, I’d be encouraging her to set up her own - and the sooner the better. As the earlier you start investing, the more time it has to benefit from potential growth (of course there are no guarantees).

• Learn about the benefits of investing sooner rather than later

There are two really tax-efficient ISAs to consider.

The Lifetime ISA (LISA) is a type of tax-efficient account that can help you buy your first home or save for retirement. As with other ISAs, you won't pay tax on any interest, income, or capital gains from cash or investments held within a Lifetime ISA.

The added bonus is that the government tops up whatever you pay in by 25% (up to the £4,000 LISA allowance each year). So, you pay in £4,000 and the government adds £1,000. The slight downside to the LISA is that if you’re using it to buy your first home, it must cost £450,000 or less - which could limit your child’s options if they end up working in London or other high-cost areas. And if you withdraw from your LISA for any other reason than buying a property or retirement (aged 60 or over) - there’s a penalty to access your money.

That’s why I’d also introduce them to a Stocks & Shares ISA, which offers more flexibility. It allows up to £20,000 per year to be saved or invested, and there are no penalties for withdrawals. It’s a great way to start building wealth over time, without locking money away unnecessarily.

• Learn more about a Stocks and Shares ISA

3. Regular saving needn’t cost the earth

Saving isn’t about grand gestures - it’s about a little and often (and the power these small amounts can make over time).

• See the difference small regular contributions can make

I’ll be encouraging my child to set up a regular savings plan into her ISA when she takes control of it. I’ll put it in context and let her know that she can invest with as little as £25 per month. That’s less than the cost of one night out a month. Not much of a sacrifice for longer-term financial security.

• Understand the power of investing little and often

4. Pensions matter - even (especially!) when they’re starting out

I know from experience that my kids can’t get their heads around retirement (they’ve not even left full-time education yet). But here’s what I’ll tell them when they do - pay attention to your pension.

If you start early, your pension pot could grow into something life changing. Thanks to auto-enrolment, most jobs now come with a workplace pension - and employers often match contributions, which is essentially free money. Plus, the government tops up any contributions you make.

I like this example which is from our principles for good investing pages on our website as it really shows the difference that starting early can make. Of course this is for illustrative purposes only. Investment values can fall as well as rise rather than give a steady return. Charges would also apply and reduce any returns.

Let’s say Petra starts investing £1,000 a year at 25 years old, while Jonathan invests the same amount from the age of 35. By the time they both reach 65, not only does Petra have significantly more money, she also stopped paying in at the age of 55. This is the power that starting investing early versus late can have.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Eligibility to invest in an ISA and tax treatment depends on personal circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.