Millennials (18- to 35-year-olds) have been found to be saving and investing more than gen Xers (aged 35 to 54) or baby boomers (aged 54+), according to new research.
It has become something of a trope in the past few years to figuratively beat millennials over the head with news of their lack of financial savviness, their supposed extravagant spending habits, and their lack of money management skills.
However, new research from peer-to-peer lender Archover, suggests these archetypes are somewhat incorrect.
A study conducted by the peer-to-peer lender found that more than one in three (35%) of millennials regularly save or invest their money, with an average saving of more than £250 each month. This compares against one in four (26%) gen Xers and baby boomers (25%).
The research has thrown up some interesting reasons as to why this is the case; more than half (59%) of millennials put their faith in technology to help them make financial decisions, while more than half (52%) also associate the words ‘risk’ and ‘investment’ with ‘opportunity’.
In contrast, more than half (55%) of gen Xers associate these words with ‘discomfort’, while baby boomers most often (58%) associate them with ‘uncertainty’.
These verbal associations perhaps allude to the idea that the older you get, the more cautious you become with your investments.
Millennials also have more healthy habits when it comes to seeking anecdotal advice, with two in five (41%) getting help from friends, family or colleagues, while only one in three (31%) gen Xers and one in five (19%) baby boomers do the same.
Angus Dent, chief executive officer of Archover comments: “Despite claims that ,millennials are stuck in a financial rut, trapped by high property prices and low-wage growth, this is a generation that has grown up in an era of record-low interest rates and recognise the need to secure better returns on their disposable income.
“On the other hand, those aged over 35 are at risk of missing out on new avenues offering higher returns. Gen X and baby boomers could benefit from following in the footsteps of millennials and introducing greater diversity into their investment portfolios to seek out higher returns.”
Gen X is the ‘generation of most concern’
In similar news, figures from asset management firm Close Brothers has found that on average, those aged 35-54 are the least prepared for retirement out of all the major generational groups.
This is mainly because they are sandwiched between baby boomers - many of whom benefited from more lucrative defined benefit (DB) pension schemes - and millennials - who are being herded into newer defined contribution (DC) schemes through auto-enrolment at a much earlier stage.
Jeanette Makings, head of financial education at Close Brothers, comments: “The generation of most concern is the 35-54 year olds who, without the cushion of a DB pension like the generation before them, and without the time to build up their long-term savings, like millennials, there is the increased risk of them being unprepared for retirement with all the issues that brings for them and their employer.”