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Millennials and Financial Services - UK - May 2015

“Millennials are conservative when it comes to their personal finances. They understand the importance of prioritising saving and paying off debt over spending, and the financial crisis has pushed these young adults to think and worry more about their financial future. Companies need to keep this in mind when aiming to capture their attention. In order to win the longer-term loyalty of this consumer group, financial providers should step up their creativity and consider greater digitalisation. But they also need to avoid falling into the trap of thinking that Millennial = digital. Mintel’s consumer research consistently shows that most Millennials are still firmly attached to the idea of at least having the option of speaking to their financial services partners face-to-face.”
– Chryso Kolakkides, Senior Financial Services Analyst

This report looks at the following areas:

  • Tech-savvy Millennials still appreciate the value of branches
  • Millennials need help when making financial choices

Perhaps the greatest distinguishing characteristic of today’s British Millennials is their tech-savviness. Having grown up with technology, Millennials are completely comfortable in the digital realm, which ultimately defines their behaviour and expectations in the financial services space.

Millennials pose an interesting challenge for financial services companies. Many came of financial age during the recession and have seen their families struggle with their finances, or have experienced economic hardship first-hand. As a result, they are typically more cautious with their money. Millennials show an aversion to unsecured debt such as credit cards or personal loans and a strong desire to save, revealing a degree of conservatism in terms of their personal finances. At the same time, though, student loans and the rising cost of housing means that many Millennials have to manage levels of debt that would have seemed extreme to their parents. The combination of these factors means that they are highly aware of the need to take control of their own financial future from an early age, and that many feel they will be worse off compared to previous generations.

This report looks at the socioeconomic profile of British Millennials (born between 1980 and 1999). It examines their life goals and how their reasons for saving or investing reflect these goals. The report also investigates how they like to bank, and the way in which they research financial services products, as well as their financial concerns and interest in the market. Finally, it discusses how this generation views various non-traditional players in the financial services space such as global technology companies and social networks.

 

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Table of contents

  1. Introduction

    • Executive Summary

        • The market
          • Millennials account for a quarter of the UK population
            • Figure 1: Projected populations at mid-year in the UK, by age, 2009-22 (proj)
          • A tough environment for younger Millennials
            • Figure 2: Current working situation, by generation, March 2015
          • Relationships and finances prioritised over social lives
            • Figure 3: Millennials’ life goals, March 2015
            • Figure 4: Number of life goals among Millennials, March 2015
          • The consumer
            • Simple financial products have the highest ownership among Millennials
              • Figure 5: Millennials’ financial product ownership, March 2015
            • Holidays and protection from the unexpected are Millennials’ main reasons for saving
              • Figure 6: Millennials’ reasons for saving or investing, March 2015
            • Family is Millennials’ number one single source of information on financial products
              • Figure 7: Millennials’ sources of information for financial products, March 2015
            • Online is the key channel – but Millennials are not ready to give up the branch yet
              • Figure 8: Channels used by Millennials for their financial activities, March 2015
            • Millennials carry a heavy load…
              • Figure 9: Millennials’ financial concerns, March 2015
            • …and take a conservative stance on personal finances
              • Millennials understand the importance of keeping up with the market…
                • Figure 10: Millennials’ interest in the market, March 2015
              • …but also the confusion that comes with it
                • Millennials label high street banks and building societies as more old-fashioned, but secure
                  • Figure 11: Correspondence Analysis, March 2015
                • Global technology companies are considered more forward-thinking
                • Issues and Insights

                  • Tech-savvy Millennials still appreciate the value of branches
                    • The facts
                      • The implications
                        • Millennials need help when making financial choices
                          • The facts
                            • The implications
                            • The Market – What You Need to Know

                              • Millennial population continues to grow
                                • Declining unemployment among Millennials, but still high
                                  • Increasingly more Younger Millennials entering the workforce
                                    • Financial health is greater among university graduates
                                      • More than half of all Millennials are renting
                                        • Nearly half of Younger Millennials live with their parents
                                          • Millennial families
                                            • Tech takes lead among Millennials
                                              • Millennials with numerous aspirations
                                              • Who Are The Millennials?

                                                • Millennial population continues to grow
                                                  • Figure 12: Projected populations at mid-year in the UK, by age, 2009-22
                                                • Declining unemployment among Millennials, but still high
                                                  • Figure 13: Number of unemployed in UK, by age, 2013-15
                                                • Tuition fee increases have hit undergraduate enrolments
                                                  • Figure 14: Current working situation, by generation, March 2015
                                                • Older Millennials reaping the reward of career progression
                                                  • Figure 15: Gross annual household income, by generation, March 2015
                                                • Financial health is greater among university graduates
                                                  • Figure 16: Current financial situation, by highest educational attainment, March 2015
                                                • More than half of all Millennials are renting
                                                  • Figure 17: Current housing situation, by generation, March 2015
                                                • Nearly half of Younger Millennials live with their parents
                                                  • Figure 18: Current living situation, by generation, March 2015
                                                • Millennial families
                                                  • Figure 19: Marital status, by generation and presence of children in the household, March 2015
                                                • Tech takes lead among Millennials
                                                  • Figure 20: Millennials’ technology product ownership, March 2015
                                                  • Figure 21: Personal ownership of smartphones, by age, September 2013 and November 2014
                                              • Millennials’ Life Goals

                                                • Health and family are still key priorities
                                                  • Figure 22: Millennials’ life goals, March 2015
                                                  • Figure 23: Number of life goals among Millennials, March 2015
                                                • Younger Millennials concentrate on their education and careers…
                                                    • Figure 24: Selected Millennials’ life goals, by generation, March 2015
                                                  • … while Older Millennials rate their health more highly
                                                    • Married Millennials look towards home ownership
                                                      • Figure 25: Millennials’ life goals, by presence of children in the household and marital status, March 2015
                                                    • Travelling is a high priority across most Millennial demographics
                                                    • The Consumer – What You Need To Know

                                                      • Simple financial products have the highest ownership among Millennials
                                                        • Holidays and protection from the unexpected are Millennials’ main reasons for saving
                                                          • Family is Millennials’ number one single source of information on financial products
                                                            • Online beats all other channels
                                                              • Millennials carry a heavy load
                                                                • Millennials understand the importance of keeping up with the market…
                                                                  • …but also the confusion that comes with it
                                                                    • Millennials label high street banks and building societies as more old-fashioned, but secure
                                                                      • Global technology companies are considered more forward-thinking
                                                                        • Social networks are friendly and accessible, but also untrustworthy
                                                                        • Financial Product Ownership

                                                                          • Simple financial products have the highest ownership among Millennials
                                                                            • Figure 26: Millennials’ financial product ownership, March 2015
                                                                          • Older Millennials have higher ownership across all financial products
                                                                            • Figure 27: Millennials’ financial product ownership - ‘Already own’, by generation, March 2015
                                                                          • Even among higher earners, investment ownership is low
                                                                            • Figure 28: Millennials’ financial product ownership - ‘already own’, by gross annual household income, March 2015
                                                                          • More than one third of Millennials own five or more financial products
                                                                            • Figure 29: Number of financial product types owned by millennials, March 2015
                                                                            • Figure 30: Number of products owned by Millennials, by age, March 2015
                                                                        • Reasons for Saving or Investing

                                                                          • Holidays and protection from the unexpected are Millennials’ main reasons for saving
                                                                              • Figure 31: Millennials’ reasons for saving or investing, March 2015
                                                                            • Older Millennials take a more forward-looking stance
                                                                                • Figure 32: Millennials’ reasons for saving or investing, by generation, March 2015
                                                                              • Parents and married Millennials most likely to save for their children
                                                                                • Figure 33: Millennials’ reasons for saving or investing, by marital status and presence of children in the household, March 2015
                                                                              • Majority of Millennials save towards a maximum of two goals
                                                                                • Figure 34: Number of reasons for saving or investing, March 2015
                                                                            • Information Sources for Financial Products

                                                                              • Millennials still rely on their family for advice
                                                                                • Figure 35: Millennials’ sources of information for financial products, March 2015
                                                                              • Nearly three in four Millennials would use online sources for financial information
                                                                                • Price comparison sites are a key information source for Millennials
                                                                                  • Professional financial advice can be particularly valuable for Millennials
                                                                                  • Channel Preferences in Financial Services

                                                                                    • Online beats all other channels
                                                                                        • Figure 36: Channels used by Millennials for their financial activities, March 2015
                                                                                      • Mobile apps have the greatest potential among the Younger Millennials…
                                                                                        • Figure 37: Channels used by Millennials for their financial activities, by generation, March 2015
                                                                                      • …despite security concerns
                                                                                        • Millennials still value personal contact in retail banking…
                                                                                            • Figure 38: Channels used by Millennials for their financial activities, by generation, March 2015
                                                                                          • …while online dominates the insurance market
                                                                                          • Millennials’ Financial Concerns

                                                                                            • Millennials carry a heavy load
                                                                                                • Figure 39: Millennials’ financial concerns, March 2015
                                                                                              • Millennials have a negative outlook for their generation’s future…
                                                                                                • …and so take a conservative stance when it comes to debt
                                                                                                • Millennials’ Interest in the Financial Services Market

                                                                                                  • Millennials understand the importance of keeping up with the market…
                                                                                                      • Figure 40: Millennials’ interest in the market, March 2015
                                                                                                    • …but also the confusion that comes with it
                                                                                                      • Making finance more fun for a ‘gamified’ generation
                                                                                                      • Associations with Non-Traditional Players in Financial Services

                                                                                                        • Non-traditional players entering the financial services space
                                                                                                          • Figure 41: Correspondence Analysis, March 2015
                                                                                                        • Millennials label high street banks and building societies as more old-fashioned…
                                                                                                          • Figure 42: Millennials’ associations with various players in financial services, March 2015
                                                                                                        • …but secure
                                                                                                          • Global technology companies are considered more forward-thinking
                                                                                                            • Social networks are friendly and accessible, but also untrustworthy
                                                                                                              • Correspondence analysis: methodology

                                                                                                              Companies Covered

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                                                                                                              Millennials and Financial Services - UK - May 2015

                                                                                                              US $2,727.29 (Excl.Tax)