October 9, 2019

Why struggling millennials deserve financial sympathy

Author:
Julie Irwin, SVP, Director of Financial Services
The majority (69%) of millennials are worried about how much money they owe

Much-maligned millennials are still feeling the effects of coming of age during the financial crisis

Millennials are feeling the pinch more than the generations both older (Baby Boomers and Gen X) and younger (Gen Z) than them, our new research shows. This age group, that are now between 25 and 39 years old, are dealing with all the responsibilities that go with adulthood but are not benefiting from the means and security previous generations enjoyed.

Savanta undertook the research this year to see how attitudes and behaviours of four generations differed on financial matters, and the results for millennials in particular were interesting.


They’re carrying a heavy financial burden

Almost half of millennials (47%) feel out of their depth when it comes to their finances. They also worry about their financial situation more than other generations, with research showing that the majority (69%) are troubled by how much money they owe.

Meanwhile, the generations either side of them are not nearly as anxious: just over half (52%) of Gen X (now aged 40-54 years) are worried about debt, along with 58% of Gen Z (currently teenagers to 24 years old). By contrast, only 29% of Baby Boomers, who are now in their mid-50s, 60s and 70s, are concerned about debts.

Worries about credit card spending could be one of the contributing factors. Our research found that almost half (48%) of millennials agree with the statement: “With a credit card I can buy the sort of things I couldn’t normally afford.” This figure drops to 39% for Gen X, 38% for Gen Z and is just 28% for Baby Boomers.

On top of this, millennials are now reaching an age when they must decide whether to start a family even though, in many cases, they are still relying on their own parents for financial support and advice. The ‘bank of mum and dad’ shows no sign of closing its doors. More than a third (35%) of millennials say they will rely on their parents’ inheritance as a source of future income, and over half (55%) rely on their parents for financial guidance.

Moreover, although birth rates are falling and many millennials are now deciding not to have children, more than a quarter (27%) expect to depend on their own kids later in life.

And, while almost two thirds (65%) are concerned about ever being able to collect the keys to their own home, nearly two in five (37%) expect to rely on property as the means to fund their own retirement.

Millennials are half as likely to own a home at the age of 30 as Baby Boomers were.

They’re trying their best in the face of adversity

More than four in ten (42%) millennials say they’d consider themselves to be more of a saver than a spender — indicating that many are actively trying to achieve financial stability. Most millennials (69%) also feel it’s important to invest their money ethically (compared to 59% of Gen X and 46% of Baby Boomers).

A lot of things that their parents took for granted are now out of reach for many millennials. According to the Office for National Statistics, in the last six years £10bn has been added to young people’s debt pile and nearly half of the UK’s unsecured debt is held by those under 35.

Despite these obstacles, millennials still aspire somewhat to the lives their parents achieved. The majority (68%) believe that owning a home is an important milestone in life, along with 63% of Gen Z. But data shows that millennials are half as likely to own a home at the age of 30 as Baby Boomers were. While it would have taken an average of three years to save for a deposit in the 1980s, it now takes around 19. Millennials are also being “squeezed out of the middle class” across the world.

This makes regular reports blaming millennials’ coffee and avocado consumption for their lack of funds all the more provocative. What’s more, the data shows that millennials do understand the value of hard work: 62% agree with the statement: “in this world, the harder you work the better you do”. This is higher than all the other generations: Gen Z (52%), Gen X (50%) and Baby Boomers (49%).

This article originally appeared in Finance Derivative

Get in touch to learn more about Savanta’s financial and generational research and how we can help you


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