I was delighted to be invited to be part of Generation Austerity Debate with amongst others Steve Bee, Simon Read and Vivi Friedgut of Blackbullion, writes Chris Williams. Inspired by MRM'S second annual Young Money Report into the attitudes of Britain's twentysomethings – "Generation Austerity", we considered the hopes and fears of a generation that has known almost nothing in their working lives but recession and economic gloom.
The report identifies this generation's anxiety (from tuition fees to getting on the housing ladder). However it is clear from the IFP's Financial Planning week survey that this concern isn't exclusive to millennials as the survey saw an increase from 60% to 82% of people worrying about money.
In many ways life is clearer (but not easier!) for the millennials - notions of cradle to grave state support have been quashed and without these traditional expectations, it is hard to come to any other conclusion than that you're on your own. This sense of self sufficiency comes through strongly in the MRM findings, with 59% prepared to join workplace pensions. The most heartening finding though is that, given a windfall, 45% would be looking to save it rather than fritter it away – this is not the feckless generation we may be led to believe.
Understanding the need to be self-sufficient and the desire to save either short or long term are only part of the story though, as this generation is incredibly mistrusting of the systems and institutions that got us into the financial crisis in the first place. This mistrust, combined with a lack of knowledge, is dangerous. Let's not forget that this is a generation who haven't received much formal (or informal) financial education.
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The question for me is where this generation will seek out advice and help - the report suggests a desire for more accessible bank branches, but given the trend for closures, this wish is likely to be unfulfilled. Some will seek professional advice. Some will seek information sites on the internet, but as one participant in the report stated most of the detailed information can go over people's heads, as it has never been explained clearly enough to them in the first place. Increasingly, inexperienced investors are seeking out their peers either on or offline. Again, the IFP's financial planning week survey reflected this trend across a wider populous, with 14% seeking professional advice, 55% making their own decisions and 16% speaking to family or friends.
Financial Planning should form part of the solution – after all, a plan with a strong sense of purpose can alleviate anxiety and worry. Initiatives, such as IFP's very own wayfinder site which provides simple steps to planning on your own can help to not just to answer this generations' need for assistance, but also rebuild trust.
