Over the last few years, various studies have appeared to confirm a troubling pattern – millennials don’t save, they don’t care about their financial futures and they don’t know how much money they need to live on. But research published today by banking app, Revolut, shows this simply isn’t true with the majority (67%) regularly saving money. Despite this, almost two thirds (63%) are still worried about their financial future.
To find out the effect of low interest rates, Brexit uncertainty, rising rents and stagnating wage growth on younger consumers, Revolut surveyed their 18-38 year old customers in the UK and Ireland to reveal their attitudes towards money.
A record number of millennials are now regularly using mobile banking apps to keep on top of their spending, which has resulted in half (50%) of young people in the UK and Ireland declaring that they now enjoy handling their finances.
However, wage stagnation and rising living costs in the UK and Ireland have resulted in almost half (47%) finding it difficult to save money each month, with 10% unable to save anything at all and two thirds (63%) admitting that they are worried about their financial future.
Rather than spending all of their leftover money on avocado toast and pumpkin spiced lattes, over two thirds (67%) are regularly saving money. One third (33%) of young people are primarily saving for their first-home, while 30% are saving towards a holiday.
With interest rates at historic lows, Revolut’s survey revealed that the majority of millennials’ money is languishing in savings accounts that are failing to match the current level of inflation. 60% of surveyed users said that their primary method for saving money was in low-interest savings accounts, with only 10% depositing their money into higher interest, tax-efficient ISAs.
Meanwhile, 8% of millennials chose to save their money as cash, with 7% saving their money in stocks and bonds, and a further 3% choosing to save their money in cryptocurrencies.
Revolut’s findings revealed that while the majority of millennials are saving money, they are reluctant to actually invest their savings. Just over a quarter (28%) of millennials are investing in stocks or shares, with over one third (36%) believing that investing is too risky.
This diminished risk appetite is reflected in the investing patterns among young people. Of the surveyed users, around half (47%) had a conservative, low risk tolerance, 35% had a moderate risk tolerance, while only 18% considered themselves to have a high risk tolerance.
Revolut’s survey also found that while over three quarters (78%) of millennials do not want to rent for the rest of their lives, almost a third (32%) fear they will never own a home. Whether they decide to rent or buy, millennials are spending a greater proportion of their income on housing than previous generations.
Inevitably, many new buyers rely on their parents for financial support to make their first property purchase. Almost half (45%) of surveyed users said that they will require financial help from family and friends in order to get on the property ladder.
The emotional attachment many people have to the idea of owning their home means that mortgage applications can be far more fraught than with other financial products. Over half (58%) admitted that the mortgage process is stressful and confusing.
Additionally, Revolut’s report found that while 90% of millennials believe that it is important to have a pension, the vast majority (60%) want more support and advice on pensions from employers, recognising their importance in providing financial security during retirement.
Despite feeling out of their depth when it comes to pensions, most millennials have a responsible attitude to retirement planning, with 80% signed up to a workplace pension.