Based on research conducted with over 9,000 people, found that renters among the late-Millennial generation (25-34 years old) are one of the least financially resilient groups in the UK.
Do you have more than 90’s days’ worth of outgoings in savings? If so, you can be classified as financially resilient.
If not, you join 34% of late-Millennials who could only survive for one month or less if they lost their income, rising to 45% for renters within this age group, which is almost double the national average.
In addition, more than two in five of this group aren’t confident in their ability to handle a personal financial crisis, again far higher than the UK average.
We all hear news of a friend or a relative who:
So what happens if you lost your income unexpectedly, whether through an accident or illness. Could you afford to continue paying your bills, your rent, and fund your lifestyle?
Less than one in ten of ‘Generation Debt’ has any form of income protection insurance to fall back on should they lose their main source of income. In fact, almost one in four would plunge themselves into further debt by putting even more on their credit cards and 3% even admitted they would turn to a pay day lender to cover their costs.
To tackle this financial insecurity, particularly among the ‘Generation Debt,’ LV= is calling on the Government to ensure that the new Single Financial Guidance Body (SFGB) has a specific remit to focus on increasing financial resilience among consumers, particularly those – such as older Millennials – who need it most.
Justin Harper, Head of Policy for Protection at LV= said: "It’s worrying that so many older Millennials have no idea how they would cope in a personal financial crisis, but those stuck in the cycle of renting are suffering even more. It’s clear that people in this ‘Generation Debt’ are at risk of finding themselves struggling to make ends meet if they lost their income. We want the Government’s new single financial guidance body to have a specific focus on helping build UK financial resilience. It’s vital that more is done to encourage individuals and families to prepare and protect themselves against the consequences of accident, sickness, or disability."
If you are worried about your finances, we've put together five simple tips to help you take control and build up your financial resilience.
* A 25 year old, non-smoker, retiring at 65 could get £1,000 of cover a month with LV= for just £6.79 a month. Based on a three month waiting period and level cover.
Methodology for consumer survey: YouGov, on behalf of LV=, conducted online interviews with 9,495 UK adults between 5th and 10th July 2017. Data has been weighted to reflect a nationally representative audience.
Methodology for recognised benchmark of financial resilience: Money Advice Service (MAS) guidelines for financial resilience state that ‘people should hold an emergency fund of three months’ income’. LV= identified the ‘least financially resilient’ groups based on the combined factors of how respondents fared against the MAS definition and how confident respondents reported to feel about being able to manage a financial crisis.
Late-Millennial renters were identified as one of the least financially resilient groups using the following methodology: 25-34 year olds (Late-Millennials) were identified as the least financially resilient age group with 55% falling short of having 90 days’ worth of outgoings in the bank against the national average of 37%. Within this age group, 65% of renters fall short of the MAS benchmark, and 44% lack confidence in handling a financial crisis, versus the national average of 33%. 43% of this age group are unable to save any money at all – this is 5% higher than the national average of 38%.