MRS Speaker Evening- Are millennials cashing out - youth sight

Millennials divider

1 YouthSight, the specialist youth research agency | [email protected] | 0207 374 0997 | www.youthsight.com

MRS Members Evening, 30th June 2016, Josephine Hansom & Sam Fagence

ARE MILLENNIALS CASHING OUT?

What does cash mean to

Millennials and Gen Z?

2 YouthSight, the specialist youth research agency | [email protected] | 0207 374 0997 | www.youthsight.com 2

Inspired by a project with Link last year

Youth market specialists

Independent

Established 11 years

We own the largest youth research panel

in UK (135,000 x 16-30yr old profiled members)


Including data from State of the Youth Nation

6,000 interviews a year:

A representative sample of 16-25 year olds

360 degree view of Youth Culture:

250 questions, new surveys every 60 days


UK’s most up to date youth tracker

Up to date data in your inbox:

Supported by quarterly briefings

Millennials divider


Who are the Millennials?


Rites of passage are shifting for the Jilted Generation

YouthSight, the specialist youth research agency | [email protected] | 0207 374 0997 | www.youthsight.com

Unable to afford big things, they’ve learnt to appreciate the small things

7

Spending

Millennials

spending their

money on making

memories, eating

out or days out

with friends

Millennials spend their money on experiences


Eating Out

Clothes/Shoes

Mobile Phone

Take Aways

Socialising

Days out (i.e. cinema, amusements)

Transport

Rent/Mortgage

Hair/Beauty

TV and Film

Books/e-Books

Music

What young people

spent their money on in the last

month

Top 12

Buying Convenience

x Say that they mostly shop online

x Make at least as many purchases online as

offline

49% Would prefer to shop online

x Made a purchase on their smartphone in

the last week

Millennials frequently make online purchases


Growing up in a recession means young people can be pessimistic about money


They can’t see a positive financial future

for their generation

They say that that they are expecting the

worst financially

They say that they are no good at saving

money

They feel that it is harder being young

now than it was for their parents

Young people take their finances seriously


49% say they spend a

lot of time thinking

about or planning

their finances

(v.33%)

Millennials divider


On Balance: The state of managing money

The success of contactless payments present a challenge for cash


Letters, 16th June 2016

£1.5bn Now spent monthly by contactless payment

…..though concerns still remain for some


22% Of under 35s do not use contactless as they

do not trust it

Concerns about contactless fraud from

Which? were widely reported in July last

year

The payday loans boom seems to be contracting but is still an option for some


• The market has contracted since the peak in 2012

• Costs were capped by legislation in 2014

In 2015, around 31,800 students took out payday loans to cover their costs

But with increasing financial pressure on young people

(especially students), these remain a tempting option


36% said that the

student finance

package did not

meet their living

costs (Unite Students,2015)

The withdrawal of

student grants

this year places

students under

further pressure,

despite the

availability of

additional loans.

Students feel under increasing financial pressure


Following the financial crisis, trust in banks is at an all time low

Less than a third of 18-24 year olds with accounts

considered their bank ‘fair and transparent’

(Accenture n=4000, 2013)

Decreasing trust in

financial institutions

provides an

opportunity for new

organisations who

seem to offer a new

style of banking, a

better deal or

convenient

technology

* Neopay, n=2000 UK Nationally Representative Sample

In a March 2016 student, 16-24 year olds were least likely to say that they

would trust their bank with e-money transactions (50%)*

Capital requirements for setting up

new banks was lowered in 2013.

SO WHAT’S NEW?


1

Based on the increased financial pressure

on students, new non-bank organisations

have stepped in to offer loans specifically

designed to supplement student loans

Interest rates are at least 8%, with the average

APR at 11.3%

The trend towards new kinds of lending continues

SO WHAT’S NEW?


2

Online-only banks have been joined by Mobile-only banks, capitalising on how

much millennials use apps to make purchases and manage money

Digital challenger banks

Customers moved £2.9 billion a week using banking apps in 2015 – up from £2 billion in 2014.

SO WHAT’S NEW?


3

Go Henry is a service that allows parents

to dispense pocket money via app and

debit card. Parents can introduce their

children to responsible card purchasing at

a younger age and monitor where money

is spent.

Pocket money goes cashless

Millennials divider


Does cash still have currency with young people?

A 10min online survey with

500 young people aged between

16-21 to collect attitudes and

behaviours (April 2015)

A 3 day insight community with 20 young people who had

completed the survey, to deep-dive

budgeting behaviour (May 2015)

+

All participants were sourced from the OpinionPanel Community – the largest youth

research panel with 135,000 profiled members –owned and managed by YouthSight

The LINK project: Young people’s relationship with cash


11%

31%

29%

29%

Earlier today

Yesterday

In the last week

More than a week ago

When was the last time you bought something with cash?

More likely to be frequent users

58%

Base : 500

Use it or lose it


67% cash is easy

to lose

Cash Debit Card Contactless

How does cash compare?


Enjoyable

Simple

Convenient

Reliable

Easy to manage my

money

Stressful

Complicated

Unsafe

Which of the following words might you use to describe each of these payment methods?

Enjoyable

Simple

Convenient

Reliable

Easy to manage my

money

Stressful

Complicated

Unsafe

Enjoyable

Simple

Convenient

Reliable

Easy to manage my

money

Stressful

Complicated

Unsafe

Cash Debit Card Contactless

SIMPLE CONVENIENT UNSAFE

Base : 500


Young people see differences between the payment types


Cash is…?

Traditional & not as important as before

Makes them feel rich and happy

Parting with cash is painful

“Cash makes micro budgeting easier

but macro budgeting harder”

(male, 21)


Money management for Millennials

&

CONTROL

CHAOS

43%

Base : 215


Cash makes it difficult to manage money well

&

CONTROL

CHAOS

43%

Base : 215



I can't keep track of what I'm spending

Losing cash is easy

You don't see the effect on your bank balance

CHAOS

Cash makes

me spend

MORE

43%

Why does having cash make you spend MORE money?

Base : 215



CHAOS

&

CONTROL

Base : 100


Cash makes it easier to stay on top of your finances

CONTROL

20%

Cash makes me

spend LESS

It's easier to control my spending with cash

I can 'see' my budget

Cash is physical

Why does having cash make you spend LESS money?

Base : 100


Cash makes it easier to stay on top of your finances

Millennials divider


Learning about financial literacy

I have a budget and I stick to it

I have a budget but I don't

always stick to it

I have a budget but I never stick

to it

I don't have a budget

I don't need a budget

79% have a budget

How well do you budget?

Base: 500


Budgeting is a big deal for millennials

Managing money can be emotional


Guilt [a feeling of responsibility

or remorse for some an

offense, whether real or

imagined] In control [to exercise restraint or

direction over]

Worry [to torment oneself with

or suffer from disturbing

thoughts; to fret]

Satisfaction [the state of being satisfied;

contentment]

Stress [to experience stress or

worry]

“I think I mostly just worked out budgeting for

myself when I first came to university” (female, 20)

“I've been taught that I should budget and that

budgets are good, but I haven’t been told an

appropriate budget or tips on how to budget”

(male, 19)


Overheard but not understood

“I was never taught about budgeting and had to

learn it on my own. If you make a million pounds a

year and spend a million pounds a year, you're still

poor. It's about thinking of the important things

before the "I want" things.” (female, 18)


How difficult is it to ask for help?

Over half say they

do not need

advice when

planning their

finances

A third say that

they feel

overwhelmed and

confused by any

financial

discussion

Millennials divider


Looking to the future

Priorities for young people in the future


Balance risk/convenience concerns with different payment types

Feel is safe/reliable (i.e. mobile/contactless)

Able to control and track spending

Avoid losing (cash)

Manage money

conveniently



Get Real: Take responsibility for planning finances

Often overwhelmed by finances, young

people can have a tendency to ignore

problems and not to seek advice

Approaching finances as a manageable

task would benefit them long term



Find acceptable ways to get financial help

Penny app tracks spending and payments and gives financial

advice in the style of a friend

messaging you

Barclays Life Skills offers young

people life skills, including financial

skills, offering them somewhere

to seek advice

Millennials divider


Thanks for listening. Any questions?

Marketing

MRS Speaker Evening- Are millennials cashing out - youth sight