Modern Young Finance: weekly round-up 10


A generation Y-er’s verdict on the latest developments in the world of young people and personal finance. To include your story in next week’s round-up, find me on Twitter.


Centrepoint has launched a new research project to learn about the financial position of young people – the survey is available here.

According to Centrepoint:

“Youth Homeless NE working in partnership with Centrepoint want to premote this research in the North East across our members and partners to gather information to provide us with a clear picture of young people’s financial circumstances in this region.  The research project is particularly well timed as we face the introduction of the Governments welfare reforms to offer us an insight into levels of debt, how they are accrued and what we can do to make a difference. The Centrepoint Policy  and Researc Team will be collating the North East results seperately to provide us with a regional report which will be circulated across our members.”



The IFS school of finance has raised concerns about the Money Advice Service‘s (MAS) business plan for 2014, worrying that this will reduce financial education to little more than a box-ticking exercise. The business plan highlighted one of its key areas of strategic importance as “developing a new UK strategy for financial capability” which intends to “help young people become more money savvy”.

Over in the States, a survey conducted by Junior Achievement has found that teenagers are feeling less confident about their financial futures. 25% of teens questioned thought that they wouldn’t be able to support themselves financially until their mid 20s.

In the long-term though, they were optimistic about how they expected to fare compared with their parents: more than two-thirds (65%) expected to be either financially better off than or at least as well off as their parents or guardian, an increase of 9% on 2012.



It appears that when investing, generation y-ers gravitate towards ETFs, according to the website ETF Trends. They are less volatile and offer better diversification through global exposure than other investment tools.

Charles Sizemore, founder and editor of the Sizemore investment letter said recently:

“Generation Y and Millennials … tend… to be a little cynical towards stock market investing, and it’s hard to blame them. They were children when the dot com bubble went bust in 2000 and most were still in college when the 2008 meltdown hit. This generation has NEVER seen a real bull market, and they question the received wisdom that stocks ‘always go up’ over time. Don’t underestimate the effects of watching their Baby Boomer parents take a beating on Gen Y’s reluctance to invest.”



A new survey by the National Association of Pension Funds (NAPF) has found that young people are more engaged with pensions than their parents’ generation, largely due to the pension reforms of the last few years.

53% of those aged between 25 and 34 said they planned to increase the amount of money they put away for retirement over 2013, compared with 26% of 45 to 54 year olds. 43% of 25 to 34 year olds also reported that they had talked more about pensions over the last year than previously.

This might seem an obvious step – after all, young people are bound to give more thought to retirement planning  as their disposable income increases, but the NAPF has found in the past that it is older groups who become more interested in saving for retirement.

Joanne Segars, chief executive of the NAPF, said: “These results are counterintuitive but encouraging. A few years ago these young workers were nicknamed the ostrich generation, because they knew they needed to plan their retirement, but were doing nothing about it.

“Their retirement might be decades away, but it looks like many younger people are taking their heads out of the sand when it comes to pensions.”

Engaged Investor worried that not enough was being done to help generation y engage with pensions – and looked at how trustees might do more to make young people take note about planning for the future (I highly recommend you to read the original article by Nicola Sullivan).

Key findings were:

-Not enough young people were on trustee boards. More needed to be done to help boards “reflecting who is working for the company”.

-The solution lies not in engaging young people with the message of saving, but giving them the impetus to do something about it.

-According to a NEST survey of 1,874, 71% didn’t want to make the wrong decisions about pensions. Unfortunately though, the language of pensions is often too complex, and puts people off doing anything about it.

-Even when people do contribute to a pension scheme, they often have little idea about maximising their earnings from it. More needs to be done to strip down the complex language of pensions. Work is being done here: NEST, for instance, recommends that difficult terms, such as “trivial commutation” be replaced with “taking your retirement pot as cash”.



Banks need to do more to engage with generation y if they are to retain them as customers in the future, according to Mark Hale, head of payments at KPMG.

Hale, speaking at the IPS conference this week, said that generation y are more likely to change jobs frequently and less likely to be benefitting from gold-plated pension schemes and other advantages such as free university education. Crucially, they are also comfortable with technology, and relatively big spenders on mobile apps and other mobile services.

According to Hale:

“Generation Y wants to switch bank account within hours, not days or a week. They want clarity on target costs. They want bank options to be distinctly different from each other, not broadly the same. They expect payments in real time, any time, and they want to use mobile devices to access information via simple and accessible channels, such as youtube. They are the most demanding type of customer – but they are also the happiest and most rewarding, if you can satisfy their needs.”

Generation Y is not completely different from Generation X – they are still going to need the same kinds of services at the end of the day. What Generation Y wants is a bank that is seen to maximise its returns rather than working against it through hidden fees, complicated charges and inflexible services. Generation Y wants to be involved in product development. Learn to attract them by understanding their behaviour, and they will reward you with their loyalty.”



Blackbullion, the independent financial capability company, is currently conducting a survey into student money – click here to complete it.


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