Life’s not all bad for a ‘blighted generation’

At the General Election of May 2015 theirs was the lowest turnout of any age group, and yet they are perceived to whine about everything.

As one quipped in a Huffington Post article: “Let’s face it, us millennials are a lazy bunch, we don’t have sex, we don’t go clubbing – we barely have enough energy to get out of bed to take a selfie.”

Yet millennials are changing how businesses operate through their idiosyncratic preferences and behaviours.

Many prefer experiences such as cheap travel and fun happenings to buying homes and cars. Homes are restrictive and can’t be afforded anyhow. Cars are an environmental abomination and sit idle in a garage for most of their time.

Millennials see what they consider examples of greed and manipulation – Sir Philip Green, the big banks – and turn to alternative investments such as private equity, angel and venture capital. The Great Depression and previous financial crashes traumatised them. In contrast, internet entrepreneurs and technology inventors are feted as leaders of innovation.

If you haven’t got much money, saving for a distant retirement is a hard concept to get your head around, but there are some golden rules.

Budget to include some measure of savings, save more than you want to and invest early – compound interest and building that nest egg is the key to avoiding a poverty retirement.

Workplace pensions are a start – money skimmed off before it ever reaches your current account is money not missed. But it grows into something significant.

ISAs are exempt from income tax and capital gains tax and highly tax efficient.

Open a Lifetime ISA account between the ages of 18 and 40, and any savings you put into it before your 50th birthday will receive an added 25 per cent bonus from the Government. Accounts will be available from April 2017. You can save as little or as much as you want each month, up to £4,000 a year.

With a SIPP (Self Invested Personal Pension) you can invest almost anywhere you like and choose your own products.

Crowdfunding is popular with millennials but risky.

There are three main types – with donation/reward crowdfunding you simply invest to feel good about yourself and expect nothing back; debt crowdfunding offers financial reward while participating in an idea you believe in; and equity crowdfunding is where people invest in exchange for equity. Then there is micro-investing. The original Impulse Saver app, launched by Westpac in New Zealand, received widespread acclaim. This was essentially a button on an iPhone app which when pressed could automatically transfer a predetermined amount up to $50 from a current account to a saving account. The idea is that by linking to a debit card, micro-investing apps can suck “spare change” from your pocket or purse and funnel it directly into an investment portfolio almost without anyone noticing.

Over time, regular small investments will build up into something larger.

So there are choices, and there is hope for millennials yet! Trevor Law is managing director of Merito Financial Services, chartered financial planners,

based in Solihull. Email: tilaw@meritofs.com