Millennial Me & My Money

London, UK, 21^st January 2016: It appears the Millennial generation has learnt from the experiences of those that preceded them when it comes to their finances. The findings from Experian’s “Millennial Me & My Money” report show that 45% of Millennials (18-34 year olds) manage to save at least a quarter of their disposable income each month, compared to just a third (34%) of 35-55-year-olds (Generation X).

Not only that, but Millennials who believe their parents have had a positive influence on their money habits have almost double the savings of those who say their parents had a negative influence[1].

Likewise, those who have benefitted from their parents’ financial experiences are savvier when it comes to managing credit. This is likely to stand them in good stead for the future; helping them access better rates on borrowing which could save them a considerable amount of money when it comes to big purchases later in life.

The research shows that Millennials who say their parents have had a negative influence on their money management are:

• More than twice as likely to have missed an agreed credit repayment (17% vs. 7%)
• More likely to have gone into an unplanned overdraft (33% vs. 19%)
• Twice as likely to have run out of money before payday in the past (44% vs. 21%)
• Twice as likely to have been refused credit (20% vs. 10%)
• More than twice as likely to have defaulted on a credit account (10% vs. 4%)
• 5 times more likely to have a County Court Judgment in their name (5% vs. 1%)

Commenting on the research, Clive Lawson, Managing Director at Experian said: “It’s striking to see just how much of an impact parental influence can have on the financial wellbeing of Millennials in adulthood. What this research made clear to me was the opportunity that we as parents have to set foundations by helping our children learn from both our experiences and our mistakes in managing money, and enjoy the advantages that might bring them later in life.

“As it stands, it appears that Millennials already surpass older generations when it comes to money management and this is good to see; however, there are still a few lessons to be learnt. Many are still making crucial errors in the way the manage credit and these mistakes, such as not even checking their own credit report can have far-reaching effects on their financial future. There was also a surprising apathy shown towards seeking value by shopping around which was is consistent with older generations.”

Key highlights from Experian’s ‘Millennial Me & My Money’ insight report:

Nature vs. Nurture:

• 80% of Millennials say they have received no formal financial education.
• 25% consider themselves to be ‘spenders’; 49% consider themselves to be ‘savers’.
• 63% say their parents or guardians have had a positive influence on their money management habits; 17% say their parents have had a negative influence
  

Millennials as Consumers:

• The average Millennial has £8,384 in savings and £2,931 outstanding debt (excluding mortgages and student loans).
• 30% save either a quarter or half of their disposable income each month.
• Millennials are most likely to spend what remains of their disposable income on eating out (54%), socialising (51%), clothes and fashion (35%). 

Common financial pitfalls:

• 46% of Millennials have never checked their credit report.
• 25% have run out of money before payday in the past.
• 21% have gone into an unplanned overdraft.
• 13% have had their card declined without realising they were out of money.

 The Role of Technology:

• 45% of Millennials online say technology plays an important role in the management of their finances; 46% say it doesn’t.
• 56% use online banking (through a website) as their preferred method of managing their money; 25% use mobile banking (through an app); 9% still favour face-to-face in-branch banking; 1% opt for telephone banking.

 Value-seeking behaviours:

• 56% say they would be willing to switch to a different service provider that offered them something extra; however, a quarter (23%) say they are not willing to switch.
• Millennials would be encouraged to switch if an alternative provider offered cheaper services (47%); better products/ services (46%) and cash incentives (44%) or rewards and privileges (37%).
• Detractors from switching, even if a new provider could save them money, include poor reputation for customer service (51%); thinking it’s too much effort (47%); if there isn’t enough of a difference in the product/ service provided (46%); and worries that there would be disruption during the switching process (39%).

 Looking to the Future:

• 33% say building their career is their biggest goal in the next two years; rising to 42% among younger Millennials (18-24).
• 11% say buying their first home is their biggest goal in the next two years, while 7% want to start a family, 7% want to travel and 5% plan to get married.
• 12% have no specific goals or aspirations for the next two years.
• Lack of disposable income (32%); lack of savings (32%); and not enough annual salary (35%) are presented as financial barriers to meeting their biggest goals within this time period.
• 49% of all Millennials are optimistic for their financial future, while a remarkably lower number are pessimistic (19%) about it.

Understanding how to manage credit well is a common pitfall that many Millennials have struggled with, and one that could impact them in later life, and so Experian has developed a series of guides available at www.experian.co.uk/improve. The guides have been designed to help people understand the credit referencing process, and how they can maintain or improve their credit rating. 

ENDS

Notes to editors:

Methodology: All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 2028 adults aged 18 to 34 (Millennials) and 2047 adults aged 35 to 55 (Generation X). Fieldwork was undertaken between 17th - 28th December 2015.  The survey was carried out online. The figures have been weighted and are representative of 18 to 34 GB adults and 35 to 55 GB adults.