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Majority of young people want to start a business but lack financial skills and confidence, Xero finds

Data found that 72% of students aged 16-21 were attracted to entrepreneurship, but half (51%) struggled with funding.

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Majority of young people want to start a business but lack financial skills and confidence, Xero finds
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Young people in the UK want to start their own businesses but say a lack of financial skills is holding them back, according to research from Xero.

Data found that 72% of students aged 16-21 were attracted to entrepreneurship, but half (51%) struggled with funding, 49% lacked confidence, and 37% pointed to gaps in basic financial skills. 

61% said running a business feels reserved for people with money or connections.

Financial freedom was the main motivation for 61% of students, but most felt anxious about the risks. 

67% said starting a business is too risky in the current climate, while a third (33%) worried about their own finances. 

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The research also found 37% of young people cited a lack of financial skills as a barrier, while only 23% pointed to gaps in traditional business skills. 

26% said they would benefit from better financial education in schools, and many wanted more exposure to real-life business scenarios (34%) and help with digital business tools (27%).

42% said they would seek advice from parents or family. 

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28% would use social media platforms like TikTok, and almost a quarter (23%) said they would turn to AI-powered searches for help.

Kate Hayward, UK managing director at Xero, said: “We’re letting our young people down by not building business financial skills into their education. 

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“We have a generation who are ambitious and driven to build something of their own, yet we’re failing to give them the skills and confidence to make it happen.

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“We’ve been pushing the Government on this because we see what happens when small businesses don’t have access to the tools, knowledge or support at the start.”

Hayward added: “We hope that the launch of The Maple Review and the headline recommendation of a Business Skills Guarantee marks a turning point for young people and entrepreneurship. 

“The UK can’t afford to leave this talent and ambition on the table.”

Kate Perry, founder of Chase Canines, said: “I started my business at 21 and quickly realised that running a small business means wearing many more hats than most young people might expect. 

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“The extent of the financial skills I was taught at school was learning how to budget, which, while helpful, doesn’t help to pay, claim and file my taxes. 

“If young people were given more exposure to business and financial management earlier on, it could make entrepreneurship feel far more achievable – and it certainly would have given me more confidence when I was starting out.”

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