Millennials (20- 35) make up a quarter of the UK’s population and by 2025, according to Deloitte, this generation will account for 25% of the global workforce.
As the generation that entered the workforce around the time of the 2007/8 recession and have faced rising house prices and decreasing pension provision, there has understandably been a lot of speculation about the long-time financial security of millennials.
The generation debate
And there are few topics as emotive as the financial generational divide. Commentators claim that Gen X (36-50) took the houses, good pensions and financial security and the millennials get more freedom, cheap flights and iPhones. It’s an emotive topic, and often supercharged with stereotypes of a lazy, live-for-the-moment generation vs their hard-working, sensibly saving elders.
Latest research by Zopa, however, paints a different picture.
Millennials and money
76% of millennials have some money put aside. And while, yes, more millennials said they were aiming for a holiday than for a house, many of their goals are long-term, including that all-important house deposit.
In fact, far from being either incapable of controlling their spending or unwilling to sacrifice short-term fun for long-term financial security, millennials are putting aside a greater percentage of their income than generation Xers, and believe they should be putting aside even more:
Millennials spend sensibly
These attitudes were reflected in their spending habits: millennials actually reported spending less than gen Xers on all items except gym membership.
Debt’s the new way of life
The report also found that the younger generation’s attitude to debt has shifted, with millennials seeing debt as a part of normal life. Almost half said they expect to manage some form of debt for the rest of their life, and the average considered ‘manageable’ was £5,892, over £1500 higher than the amount gen Xers described as manageable.
Here’s the highlights of what they think about their finances:
How can P2P help?
Giles Andrews, Executive Chairman and co-founder of Zopa, comments: “In recent years, low interest rates have discouraged millennials from investing in their future, so it’s vital that young people are now given innovative ways to grow their money by making saving and investing worth their while.
“At Zopa we’re committed to creating a richer life for everyone by making money simple and fair. This is why we’ve built our P2P lending products based on customer feedback. We believe that by creating a fairer future we can help people boost their money to achieve their life goals. We believe peer-to-peer lending offers will be the normal way for millennials to invest for the important things in life like a home deposit.”
Read the full report.