Generation austerity: Brexit and beyond

1. Context
2. The study
3. Key findings
4. Points to consider

• Context
• The study
• Key findings
• Points to consider
• Full report

Context

Focused on young adults who have grown up in the shadow of austerity, the Young Money series seeks to reveal the attitudes and behaviour of 18-25 year olds towards topics such as savings, investment and accessing financial advice. Generation Austerity: Brexit and Beyond is the fourth report in this series. Data for this report was collected in the wake of the Brexit results and highlights the feelings of young people during the post-Brexit fall-out.

The study

This report does not outline any specific research questions, but rather takes a broad look at the views of young people (aged 18-25 years) on topics such as pensions, benefits, and advice.

Data for this report was collected through a survey by OnePoll. One thousand young people were surveyed between 29th June and the 11th July 2016.

Key findings

• Pension and benefits :
  • On average, young people think they will be able to retire at age 67, with 20% thinking they ought to be able to retire by the age of 60.
  • 42% believe they will fund their retirement mainly through state pension, only 21% are planning to fund retirement through a defined contribution workplace pension, and a third expect to fund retirement through an ISA.
  • When asked how much they need to save to fund their retirement years, on average the group estimated a savings pot of £287,150 would be sufficient – an under-estimate of what they would actually need.
  • More needs to be done to inform young adults of the likely cost of retirement.
• Saving and spending:
  • 48% expect to be worse off following the Brexit results, and 13% are put off saving due to the uncertainty caused by the results.
  • 30% of young people want to buy a property, making getting on the housing ladder the top financial priority for this age group. This tends to be more of a priority for young women (34%) than young men (25%).
  • 24% of young people are not saving at all, with clearing their debts was a top priority for 26% of young people.
  • Of those who were not saving: half (47%) said it was because they did not have enough money; and 29% did not understand enough about investing.
  • To encourage saving the industry needs to develop solutions that are engaging and relevant to young adults.
• Investing and the economy:
  • 22% of young people think that investing in a fixed income would make them the most money in the long term, while 18% think owning their own home would be the best investment option and only 8% think stocks and share offer the best return over a similar period=
  • The industry needs to do more to encourage a long-term approach to investing and in providing user-friendly information.
• Advice and access:
  • Young adults are only willing to pay on average £28.50 for an hour of financial advice. This falls significantly under the current average cost of £150 per hour.
  • 51% would not be willing to pay for financial advice at all, but if they suddenly came into money, 22% said they would look into financial advice and 23% said they would once they had more assets.
  • If they were going to work with an advisor, 22% said they would most likely chose one who offered a young people’s discount, and 12% said they would look for a firm that had younger advisors or focused specifically on giving advice to millennials.
  • 23% think banks could help them meet their financial goals by offering free workshops on managing money, and 20% would like to see banks staying open longer and on weekends.
  • There is an appetite for advisers who cater specifically to young adults’ needs, but the pricing model needs to be adjusted.

Points to consider

• Methodological limitations: No information is given about the sampling frame of the survey or the survey itself. Therefore the report is only able to provide top level results and generalisations.
• Generalisability/ transferability: It is not possible to comment on the generalisability or transferability of this report due to the limited amount of information provided about the respondents or the survey.

Full report

Generation austerity: Brexit and beyond - full report