Over half of millennials parting with their savings to boost struggling economy
More than half of millennials plan to spend some or all of their savings to give British businesses and the struggling economy a boost, according to new research from NerdWallet.
The personal finance platform commissioned an independent survey of over 550 millennial savers (aged 18-34). It found that the average millennial has £8,675 in savings.
The research revealed that two fifths (40%) of millennials have been spending more since the base interest rate fell to 0.1% in March 2020. Meanwhile, almost 45% have been saving less, following the Bank of England’s decision to cut the rates.
Indeed, the research also revealed that over half (51%) of this age group plan to spend all, or some of their savings in 2021, with a view to help British businesses and the wider UK economy recover from the pandemic.
However, when it comes to long-term financial plans, over three in five (62%) of millennials claim to have a clear savings strategy in place.
Indeed, over half (56%) of millennials plan to invest their savings in stocks and shares, or bonds and ISAs in 2021. When asked about pensions, 48% said they are planning to put money into a pension scheme rather than a traditional cash savings account.
John Ellmore, UK director of NerdWallet, said: “2020 was a volatile year for savers. COVID-19, Brexit uncertainty and record low interest rates forced many to re-evaluate their savings strategy, and today’s research shows the impact this is continuing to have. In the short term, at least, it seems that younger savers in particular are prioritising spending over saving .
“That said, it is encouraging to see that many still have a longer-term financial plan in place. Clearly, this is a conscientious generation of savers who are willing to investigate alternative saving strategies. I expect this will continue in 2021 as millennials look beyond cash savings and consider new ways of reaching their long-term saving goals.
“Whether savers opt for ISAs, pensions or investments to bolster their future finances, individuals should always thoroughly research all options available to them – doing so will ensure that they are well-set for the future.”
