The best millennial finance stories of the past fortnight. Find out how millennials are driving the impact investing movement, why some millennial homeowners have ‘buyers’ remorse’ and why millennials could be missing out on free money.
A study by Bank of the West suggests that homeownership might not be all it’s cracked up to be, particularly among millennials. According to the survey, four in ten millennial homeowners felt they’d made a poor financial decision. This was put down to unexpected costs in the buying process and buying prematurely, underlining the importance of carefully considering additional costs before purchasing.
Millennials keen to get on the housing ladder could be putting their retirement at risk according to a new survey. According to the Bank of the West (who also conducted the above survey), one in three millennials who already own their own homes have used money from their pension to fund down payments on their house. The report reminds millennials of the importance of ring-fencing savings so they have money to fall back on retirement.
A recent survey from the Empower Institute, a US retirement plan record keeper, has revealed that US millennials are making better provision for retirement than expected. According to the survey, this age group is on track to have more retirement income than both baby boomers and Generation X. For US millennials, this is down to the 2006 Pension Protection Act, which came into force just as the oldest millennials were entering the workforce. It works in a similar way to auto enrolment in the UK, as it automatically enrols participants, automatically increases participants’ contributions as their salaries increase and requires employers to pay a minimum contribution.
Millennials could be missing out on what amounts to free money according to a new Bankrate.com study. According to the report, millennials are most likely to keep their investments in cash – even in cases where they’re not planning to touch it for ten years or more. The authors of the report say that investing in the stock market is a better long term option to build wealth.
This piece looks at the rise of the subscription model and why pay-by-finance doesn’t seem to have caught on among other higher ticket items. It suggests that a fixed finance model with a definite end date could be an attractive model for millennials who are accustomed to paying for subscriptions, such as Netflix.
Barclays’ latest Impact Investing report has found that millennials are driving an increase in sustainable investing. The report, which surveyed 2000 people, found that almost half of respondents under 40 had already made impact investments. In contrast, 9% of those between 50 and 59 and 3% of those over 60 had done the same. Millennials also said they’d be prepared to allocate three times as much of their portfolios to impact investing as other age groups.