Millennials are concerned about their financial future
invstr has unveiled new research outlining that today’s millennials are worried about how they will manage their money throughout their lives, and highlights significant gaps in their financial understanding.
According to the survey, millennials across the UK are apprehensive about their ability to manage their own finances with more than 68 per cent of respondents stating that they were worried about their financial future, and either wanted to do something about it or didn’t know what to do about it, and over 50 per cent stating they do not have a pension (either company or private), despite auto-enrolment being well underway.
Of the three age brackets surveyed (16-20, 21-24, 25-30), it is the 25 – 30 year olds who are most worried about their financial future and want to do something about it (over 40 per cent).
As a generation of digital natives often cited as having a better education than their predecessors, the survey revealed that although millennials are worried about their financial future (or consider that investing is important), their knowledge of finance is very limited, with 57 per cent trusting their friends and family for financial advice against only 46 per cent trusting professional advisors. More than any other region, millennials in the North East (63 per cent), Scotland (63 per cent) and Wales (64 per cent) trusted their friends and families.
Of the 2000 millennials polled, nearly half (48 per cent) of the respondents did not know what a robo-advisor was, with 42 per cent who did know, stating they would not trust a robo-advisor with their investment. Despite almost half (43 per cent) claiming they had invested in an ISA in recent years, 67 per cent confessed to being unsure of the ISA allowance for 2015 / 2016 tax year (£15,240). Half of the respondents claimed they did not know where the pound (GBP) sat in relation to the US dollar ($1.4512) and the vast majority (80 per cent) did not know where the FTSE currently (6,209) stood.
The survey, which has been released to coincide with the launch of invstr 3.0, an app that seeks to make access to financial information easier, and empower millennials to take control of their financial future, unveils how only 20 per cent of respondents claimed to have their financial future ‘covered’ and even less so in Northern Ireland (2%), while 39 per cent of millennials admit that they are worried about their financial future and want to ‘do something about it’ and 29 per cent stated they were worried but didn’t know what to do about it.
When asked about how they could be persuaded to make a financial investment, 41 per cent said they’d be encouraged if there was a fun way to learn to invest, with twice as many women as men surveyed wanting to have fun. Almost 36 per cent would like to see cheap access to financial information.
invstr, dubbed the ‘Facebook of Finance’ was founded by Kerim Derhalli, a former Managing Director at Deutsche Bank, with the mission to empower everyone with the financial information needed to make smarter financial choices, and for anybody, regardless of skill or experience, to understand how the markets work.
Kerim Derhalli, CEO and Founder of invstr said: “Millennials, as the single biggest demographic group and the most tech savvy, are aware of the importance of finance – probably more than any other generation before them because they have grown up in the aftermath of the financial crisis.
As a generation that carries larger amounts of debt and new personal financial responsibility, it is important that they are empowered to make smarter financial decisions in order to ensure they are financially set for the future.
These survey findings reveal a generation that is fearful of what their financial future may hold, and feel uncertain on how to take the necessary steps to empower themselves. There is a huge education piece to be done, and this is the driving force behind invstr – we want to make financial information freely available to everybody, so that people can take charge of their own personal finances, and make smarter choices.“
As consumer trust in traditional banking systems remains low, and the rise in Fintech apps continues to disrupt the sector, Kerim continues:
“The financial markets are being disrupted. Trust in the old system is eroded and people, especially the younger generations, are seeking new tools and methods to make their own informed choices. Digital has transformed entire industries – we have seen it with Airbnb and Uber - and the financial markets are next.”
“We launched the first version of the app in December 2014 and to date it has been really well received with over 120,000 downloads, demonstrating a real appetite for both financial information and a tool of this kind.”
As the company continues on its mission to empower the masses, the app has undergone a complete overhaul in order to further simplify the user’s experience and introduce new functionality – making it fun, social and easy to learn about the markets. This includes two new games – a BUY/SELL Investment Game and a Prediction Game – allowing users to practice the skill of trading and investing, user scorecards to track performance, user badges to enhance profiles, and badges to reflect the financial personality of investment product (financial instrument) that users are interacting with.