- Half of UK adults said they would consider using savings tips from social media
- The FCA says people should be wary of being misled by scammers online
- Young adults are most likely to take part in the ‘penny saving’ TikTok trend
Financial influencers on social media sites such as TikTok are the second most popular place for under-25s to get financial advice, according to research.
More than a third (36 per cent) of people in that age bracket said they relied on money influencers or ‘finfluencers’ as their main source of financial information.
It was second only to speaking to a close family member, which 39 per cent of under-25s said was their first port of call for money advice. Less than a tenth of said they would head to a financial services provider for similar help.
It’s not just Generation Z that are looking for money tips online, however.
Some 52 per cent of all UK adults reported at they already are, or would consider, using a savings tip from social media, according to the research by Intuit Credit Karma.
In fact, a majority of UK adults who took financial advice from social media reported that tips from TikTok in particular had improved their finances.
Money influencers have a big following on TikTok, where the hashtag #Fintok – short for financial TikTok – has accrued almost four and a half billion views.
Videos sharing tips for younger people on how to save more money are particularly popular.
Akansha Nath, Intuit Credit Karma general manager, international said: ‘As consumer appetite for money advice grows, there’s never been so much financial information available and from such a wide variety of sources.
‘Social media and specifically TikTok has become increasingly popular, offering advice in a format young people in particular are confident and comfortable with.’
‘No spend’ challenge appeals to young users
Often, financial advice gleaned from social media comes in the forms of savings challenges and trending money tricks, such as the ‘no spend money challenge’.
More than half of the survey’s respondents said they were considering, or had tried, this trend, which sees people try to have as many days of spending no money as they can over a month.
As many as 70 per cent of under 25s said they would be prepared to try the challenge.
‘Some challenges can be helpful depending on a person’s situation. For example, the “no spend” money challenge can get people thinking about where they spend their money, and really assess if they are getting the most out of some purchases,’ Nath said.
Just under half, meanwhile, said they would try ‘zero-based budgeting’, which sees spending allocated only to essentials, with the rest being saved.
The trend that under 25s are most likely to take part in is ‘penny saving’, through which participants increase the amount saved each day by 1p, reaching £3.65 on the last day of the year, and saving £667.925 in total.
While young adults may be unlikely to turn to financial advisers for financial advice, by looking to TikTok they may find that they aren’t actually saving as much as they might have been promised.
While more than half said the social media tricks had helped them save more, 39 per cent said they made no difference, and two per cent said they were actually worse off.
Should you trust a ‘finfluencer’?
Despite their popularity, ‘finfluencers’ may not be the most reliable source of advice.
‘There’s lots of misinformation on social media, particularly when it comes to investing or cryptocurrency, so it’s really important to double check financial advice of any nature that you’ve seen online,’ says Nath.
‘Always take care when following financial advice from a new source, especially when it comes to advice that could risk you losing money or put your finances in jeopardy.’
She said: ‘The FCA has also recently stated it is concerned that some finfluencers are not labelling some content as ads or are promoting inappropriate financial products without understanding the risk or how they work.
‘That’s why it’s really important to double-check financial advice of any nature that you’ve seen online.’
A spokesperson for the Financial Conduct Authority told This is Money: ‘We want to see more young people engaging with their money, and social media can be a helpful resource to get you started and find support. But financial services can be complex, and people should be wary of being misled by scams or dubious advice promoting specific investments.’
‘We’re updating our guidance for firms and influencers marketing financial products online so they can stay on the right side of our rules. For those touting products illegally, we will be taking action against you.’
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