Only two in five millennials see home ownership as a long-term financial goal
Only two in five millennials see owning a home as a long-term financial goal, Yolt, the smart thinking money app and CEBR has found.
However, the#MillennialMoney research found that 64% of this age group are optimistic about achieving their future financial ambitions, compared to less than half (47%) of their Generation X predecessors and only four in 10 (39%) Baby Boomers.
Pauline van Brakel, chief commercial officer Yolt, said: “It’s clear that millennials are both optimistic and realistic about their financial goals.
“Far from being a frivolous free-spending generation, our #MillennialMoney research shows that lots of young people are sacrificing their day-to-day standard of living to future proof their finances. Purchasing a property is an area that has been particularly hit by this.
“Apps like Yolt have been designed to make money management much easier by enabling users to track their spending and manage their savings.
“Our research really debunks millennial money myths and attitudes, proving that millennials are more focused on saving, meeting financial goals, and investing in their financial futures.”
Historically, homeownership has been considered one of the most important aspects of growing up in the UK.
Whilst the recent Budget included an extension of the Help to Buy scheme and a stamp duty break for shared ownership properties, both aimed at supporting first time buyers onto the property ladder, purchasing a home is simply no longer a realistic goal or priority for many millennials.
However, a lack of homeownership ambition amongst millennials isn’t due to the ‘frivolous spending’ that is so often associated with this age group.
Millennials are saving more as a percentage of their monthly income to fund future financial goals than any other age group. On average, millennials are putting away 25% of their income each month, the highest proportion of any age range included in the research.
The next closest age bracket is 36-44 year-olds, who manage to save 17% of their salary, highlighting that millennials are not as reckless with their finances as many would think.
Some 62% of millennials put away at least 10% of their income every month and 18% are able to save 50% or more of their salary. These relatively high saving rates might be made possible by the fact that 26% of millennials still live at home.
Whilst optimistic about their future financial goals, millennials balance this with an acute sense of realism, with 84% admitting they sacrifice their day-to-day standard of living to help achieve their long-term savings goals.
Although fewer millennials now aspire to own a home, they still have strong financial aspirations for their futures.
Family was an important theme throughout the research, with nearly half (49%) of millennials stating that supporting either their current or future family was their most important long-term financial goal.
Despite being the best age group at saving, millennials still rely on friends and family to get by. The survey revealed that one in five (20%) 18-35-year-olds receive some sort of financial support from loved ones to help cover their cost of living.
The level of reliance on family and friends rises for millennials aged between 28 and 35 years old – the age we now tend to see first-time buyers get on the housing ladder, often with help from the Bank of Mum and Dad.
When asked what would encourage them to save more of their monthly income, 45% of millennials said a better return on their savings and 43% wanted more tools to help them easily track and manage their savings.
More than a third (34%) of millennials wanted more education around the saving options currently available.