According to a recent YouGov report, millennials form one of the largest generations to date. Born between 1980 and 1999, they constitute one in four people globally and 16 million citizens in the UK.
They demand individualism and adventure. Around 26% will take three holidays in 12 months, with 62% booking via websites such as Airbnb rather than normal tour operators. Millennials seek independence, require unique experiences and do not want to separate from technology.
When it comes to spending money, cash is spent on what is deemed essential, with plenty of research done online. The first financial commitments are likely to be an IPhone, an IPad or a car, so it is not that they cannot afford to save for a deposit.
Lenders should start looking at how to attract these potential first-time buyers earlier and in a different way.
Millennials are a generation that want to see immediate benefits, saving rates provides little in return. Offering the kinds of reward they find attractive in accordance with their hobbies may do just that.
Research shows these include music, films, TV, eating, drinking, travel/holidays, fashion/design and UK news. One solution could be to provide a range of discounts, vouchers and free tickets across these areas as regular rewards.
This would also work better for parents looking to financially support their children. By depositing money into an account, they can be confident their children will enjoy the short-term benefits of any giveaways, as well as the longer-term benefits of saving earlier.
In terms of presentation, an app detailing the offers and how their potential house deposit is growing, brick by brick, would be ideal. This could be complemented by a simple calculation showing how their current deposit would stack up against an average starter home in that area.
The later they save, the harder it is to get on the ladder, so we need to think of new ways to make saving attractive and relevant to this generation of potential first-time buyers.