Almost two-in five (37%) millennials would rather spend money to enjoy themselves now, rather than save for the future, according to research.
The finding, published by Investec Wealth & Investment, may not be a surprise to many, but the study shows that it is necessity rather than hedonism that dictates the millennial generation’s preference.
High living costs make savings and investment today much harder now than in previous generations, said 88% of the under-35s surveyed by Investec, and a fifth think they will never be free of debt.
Most over-55s have sympathy. Two-thirds (66%) in this age group agreed that the cost of living meant the younger generation had never had it so bad. As a result 83% of older people believed they invested more when they were young than the current younger generation does now.
The research also underlined how reliance on debt is eroding the culture of thrift among millennials; 27% of under-35s think there is little point in investing because debt is unavoidable compared to just 5% of over-55s.
However, millennials were supportive of the idea of frugality and saving, with 83% agreeing they will only get the things they want by working hard and saving up, and 67% were worried by the long-term consequences of failing to save and invest.
Chris Aitken, head of financial planning at Investec Wealth & Investment, attributed the decline of thrift to young people becoming more accustomed to taking on debt to finance their lifestyles.
“Debt is part-and-parcel of many young peoples’ lives long before they contemplate taking on a mortgage, but given how much is required for a deposit it’s easy to understand why so many millennials don’t see the point of saving for one,” he added.
“There’s a danger that this mindset becomes fixed for life. Our advice is to start saving and investing what’s affordable as early as possible.”
The research surveyed over 2,000 respondents.
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