Later Life  

How to help millennials plan for their financial future

"It’s vital people continue to consider financial advice to help them increase their resilience to financial shocks both in the short and long term, but often people who haven’t used advice before are put off by a perceived lack of trust or the associated cost."

Engaging millennials

Alistair McQueen, head of savings and retirement at Aviva, believes despite the advice gap, a great prize awaits IFAs who are savvy enough to engage millennials. He explains: “The financial challenges facing today’s younger generation are unprecedented.

"Student debt is rising, house-prices are beyond reach, there are no jobs for life, and final salary pensions are finished. It’s a perfect storm. Their need for help is greater than ever, and advisers are uniquely placed to deliver. 

"Investing in younger savers today also makes good sense for all businesses tomorrow. There are over two billion under-30s in the world today, and by 2025 they will represent 75 per cent of the global workforce. No business can afford to ignore 75 per cent of its future market."

However, Fiona Tait, pensions specialist at Royal London, thinks advisers must adapt and deliver improved digital services to engage millennials more effectively. She comments: "Millennials have grown up with the internet and so the most effective way to get them started is to use digital and social media.

"Improvements in digital communications, including the promised pensions dashboard, should make it easier for millennials to gather information and submit the data needed to create a financial plan, as well as doing some of their own research before they speak to an adviser.

"Digital services also make it easier to offer regular updates and tailored communications which improve consumer engagement. This leads to better consumer loyalty and a greater likelihood that the individual will continue to commit to their plan and adapt it so that it remains suitable as their priorities and financial status changes."

Cutting costs

So, what can young people do get on the property ladder? According to Stuart Ritchie, chartered financial planner, at AES International, millennials must get back to the basics of managing their money by paying off high interest debt first, such as credit cards, and avoid accumulating more debt.

He added: "Cut your costs – do you really need an expensive luxury item? If you want to own a house, you need to establish a budget and to stick to it. You then need to save and invest regularly and wisely. 

"If possible, set up payments into your investment or savings account automatically on payday each month, so you don’t even see the money in your current account.