I recently wrote the foreword to Common Vision’s Millennials and Banking report, outlining my concerns about how this latest crisis could derail the younger generations just as they were starting to recover from the 2008 financial crash. Here’s why the financial sector needs to play fair by young people at this worrying time…
The publication of Common Vision’s Millennial and Money report is incredibly timely. As the coronavirus crisis sweeps the Western world and presages a recession in most countries – including the UK – the younger generations are confronting yet another economic shock with profound consequences for their personal finances.
It is sadly ironic that this latest crisis has hit just as millennials were starting to recover from the last financial crash, a whole 12 years ago. The previous recession arrived just as we were leaving school, graduating from university and/ or starting in the world of work. Suddenly, getting a stable job that paid enough to meet basic living and housing costs became difficult, if not impossible. Our generation would spend the next decade or so trying (and often failing) to keep our heads above water amid the tightest squeeze on wages and living standards in modern times.
The fallout from the last recession has indelibly shaped our generation’s outlook. I started the Young Money Blog as a struggling graduate myself, in the hope that learning about money might help me feel more in control of my situation.
But I also wanted to challenge the media’s neglect (and frequent demonisation) of millennials. Moreover, I felt that the financial industry and regulators could serve young people far better than they did.
“It’s ironic that this crisis hits just as millennials were starting to recover from the last economic crash, 12 years ago”
It was taxpayers who had to bail out the banks at their lowest point in 2008, with the government still propping up the housing sector through schemes like Help to Buy. Yet young professionals who want to contribute to society have been let down at every turn by products and policies that have held them back rather than propelled them forward.
The housing market has become an intractable mess. Exploitative debt products like payday loans have caused untold damage. Banks offer no reward for saving – i.e. doing the right thing. Investing services and financial advice cater mostly to wealthier, older people. Proper financial education to prepare young people for our complex consumer economy remains a pipe dream.
While baby boomers and other generations have certainly had their share of hardship, it has been hard not to feel resentful that generous financial perks and universal benefits remain an inalienable right for older, asset-rich citizens, while young people are increasingly expected to shoulder the tax base even while seeing lower household incomes than retired people.
But despite all this, and the new challenges we face, I am hopeful. Organisations like Common Vision are working hard to highlight both the hard facts and lived experience of young people when it comes to their personal finances today. This robust but empathetic report shows millennials like me have so much to give – but only if we’re given a fighting chance by the financial industry and government.
In-depth work like this can really help to shift the dial and ignite a much-needed conversation about how to better serve young workers and taxpayers today, who will go onto become the carers, business leaders and innovators of tomorrow.
As we sail into a new financial storm, with unknown impacts on us all, it’s clear we need this sort of thinking now more than ever. Let’s hope the people that matter take heed of it.
First published as the Foreword to Millennials and Money: Understanding young adults’ financial experiences