MOST millennials can’t afford to save or invest due to the high cost of living and one fifth believe they will never be debt free. However, the older generation continues to save.
According to a new survey from Investec Wealth & Investment, 37 per cent of people under 35 would rather spend now than save or invest for the future, with 88 per cent blaming the high cost of living for their ‘spend now, save later’ attitude. Among over-55s, just 21 per cent said they were more likely to spend now than save later, demonstrating a significant generational divide in attitudes towards personal finance.
One third of the under-35s surveyed said that they can’t afford to save as a result of university debt and 27 per cent said that there is little point in investing because they are in so much debt. By comparison, just five per cent of over-55s believed unavoidable debt was a barrier to investing.
Chris Aitken, head of financial planning at Investec Wealth & Investment said that young people have become more reliant on debt to finance their lifestyles.
“University fees mean that debt is part-and-parcel of many young peoples’ lives long before they contemplate taking on a mortgage,” he said.
“But given how much is required for a deposit it’s easy to understand why so many millennials don’t see the point of saving for one. There’s a danger that this mindset becomes fixed for life.
“Our advice is to start saving and investing what’s affordable as early as possible.”
67 per cent of millennials admitted that they were worried about the long-term consequences of failing to save or invest, while 83 per cent of older people believe that they invested more than the current generation of under-35s when they were the same age.