Younger generations are facing a more challenging financial outlook as they plan for the future.
Since 2015 then there have been a number of improvements for the family purse. Both monthly income and savings levels are now at record highs and are an indication that the continued growth of the economy has trickled downwards. However, the short and long term impact of the vote to leave the European Union on the economy and on the finances of UK families is still to be known.
Since the Brexit, there has been a significant increase in the numbers of people who now have concerns about their future finances following this historic decision, with younger age groups feeling particularly worried.
Prior to the vote, recent improvements had helped families to feel less concerned about certain aspects of their finances, with this holding true even despite widespread speculation about the impact of a leave vote in the run up to the referendum.
Household debt also remained stubbornly high, although after a significant increase last winter, there are signs that levels are beginning to stabilise.
Millennials, referred to as those aged 18-35, have grown up in a different world to that of generations before them. With recent increases in tuition fees and rising property prices, millennials face a unique set of financial challenges that their parents and grandparents did not have to deal with. They have grown up through the 2008 recession, having to navigate
a difficult jobs market as a consequence, and they are the generation whose lives over time will be most impacted by any changes to Britain’s economy and society following Brexit.
The generation is already facing the challenge of balancing the immediate future with the longer term. While many expect to increase their earnings through career development in the future, many are also struggling to save for the future with little left over each month. They understand the importance of planning for retirement but a considerable number also
have no plans in place to start a pension anytime soon.
Although it is possible that the financial health of millennials will improve as they get older, there is a notably higher sense of concern among this age group compared to the UK population as a whole. Post-referendum, millennials have experienced by far the biggest increase in concerns about their financial future. The importance of financial planning is applicable across all generations and the earlier families can start, the easier it is to achieve goals in life.
Source: Aviva Family Finances Report