The UK Financial Services Authority (FSA) has warned that there is an urgent need to help young people manage their money after a survey revealed that those in the 18-40 age bracket are significantly less financially capable than their elders.

The FSA survey, Establishing a Baseline, is the largest survey of its kind in the world with participants between the ages of 18 and 90. The survey found that although most people are capable of managing their own finances, three million people in the country find it a constant struggle to keep up with their commitments.

The survey found that 79% do not shop around or consult a financial adviser before buying a product, this can lead to misunderstanding. The survey also found that 40% of people who own an equity ISA are not aware that its value can go down as well as up depending on the performance of the stock market.

The FSA also found that people are not planning ahead, with 70% of respondents making no provision for a drop in income and 37% failing to make any provision for retirement. Although the findings were across all age groups, the results for the younger consumers were worse, particularly in the 18-30 group.

John Tiner, chief executive of the FSA, said: The ability to manage money grows with age and experience. But rapidly changing economic and social trends mean that today’s 18–40 year olds are faced with greater challenges than were faced by their parents.

They have greater access to credit and are becoming consumers at an earlier age. On top of that, the costs of higher education and of retirement are being increasingly borne by individuals rather than the state or employers.