The Standard Chartered’s latest global survey indicates that COVID-19 has had a massive impact on the spending and savings of people across generations, but no group more so than Millennials.
Millennials are the most likely to be struggling to meet day-to-day expenses and report higher levels of borrowing in the last month. Yet, faced with these challenges, the pandemic has galvanised this generation to better prepare for their financial future, encouraging Millennials to make changes to how they manage their money.
The study of 12,000 adults across 12 markets – Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, UAE, the UK and the US is the third in a three part series, looking at how COVID-19 has transformed consumers’ way of life, and what changes could be here to stay.
Though the first survey focused on the pandemic’s impact on earnings, and the second looked at changing spending habits, the final survey provides new insights into how the global health crisis has altered the way people are managing their money day-to-day, in pursuit of their long-term goals.
Almost two-thirds of people globally, found managing their money more difficult since the start of the COVID-19 outbreak, but Millennials found it the hardest. They are 39 per cent more likely than those over 45 to feel they don’t have control of their bank balance, and 24 per cent more likely to have found meeting day-to-day expenditures, such as household bills, highly challenging. Meanwhile, 35 per cent of Millennials reported that their borrowing has increased in the last month, versus 24 per cent of those aged 45 or over.
Despite these significant challenges, Millennials are the most likely generation to be in active pursuit of their long-term financial goals. Globally, 33 per cent of them are saving for a major purchase such as a new car or home, compared to 18 per cent of those aged 45+, while 35 per cent are trying to save more for retirement, compared to 29 per cent of those aged 45+.
To meet these ambitions, Millennials are the most likely to want to better track and budget their spending. Only 42 per cent want to alter their daily spending and 30 per cent started using a new money management or budgeting app since the pandemic began, with 61 per cent of those who haven’t planning to do so in the next three years.
Globally, Millennials are 79 per cent more likely than those aged 45+ to have started a digital piggy bank; 67 per cent more likely to have started using a money management or budgeting app; and 65 per cent more likely to have started using a savings or investment app for the first time during COVID-19.
Of those who have used new ways to manage their money since the start of COVID-19, the majority of people have had a positive experience. In the markets we surveyed, 65 per cent of Millennials have enjoyed using these tools, compared to half of people aged 45+.
This embrace of new technology to help manage money amid the current economic turmoil may be why Millennials are more confident than any other generation that they can achieve their long-term financial goals. Almost half (46 per cent) are more confident than they were before the pandemic started.
In contrast, only 31 per cent of those aged 45+ feel more confident they’ll reach their financial goals, with those aged 65+ the least confident about achieving their financial goals since the COVID-19 outbreak began.
Meanwhile, across all the generations, the pandemic has made people more careful with their saving and spending and less likely to splurge. When asked what they would do, if given the equivalent of £1,000 by their Government with no strings attached, the most common responses globally were to use the money to pay off debt, cover day-to-day expenses or save for the long-term. Respondents were least likely to spend the money on a holiday, either foreign or within their country.
Aalishaan Zaidi, Global Head Digital Banking at Standard Chartered, said: “The scale of the current crisis has triggered Millennials to ‘come of age’ financially, with many now taking a hard look at their finances and taking more proactive steps to meet their life ambitions.
Millennials, indeed all generations, want more advice and education on how to manage their money with people now realising that being both financially and digitally savvy is a must. Banks have a key role to play in providing accessible advice and effective tools that empower people to plan for an increasingly unpredictable future.”
