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  • Lisa Kleiman
  • July 27, 2016 03:56:58 PM

A Little About Us

Why are some people better at saving money? Could your pension be at risk? How to kick start your business with a guarantor loan? Find out the answers to these questions and more from the independent loan broker Solution Loans, with lots of money saving tips and expert financial advice on a range of issues, from family budget travel to cheap home improvements and more.

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The current trends of the UK property market

The UK property market is very much a mixed... You're reading the blog post The current trends of the UK property market that was written by and first published on Getting Loans and Credit & Managing Money.

The UK property market is very much a mixed bag right now. Recent data from the Royal Institution of Chartered Surveyors (RICS) seems to show that estate agents currently have some of the lowest expectations at any time in the past decade. On the other hand, a slowing in price growth has meant that buyers have been able to find bargains and more people have gotten a foot on the first rung of the property ladder. Much of the uncertainty that currently exists is stemming from Brexit and the impact it may – or may not – have on UK property. Some experts predict significant falls in prices; others say the impact will be small. Either way, we are seeing some fairly solid trends that are worth keeping an eye on.The UK Property Market

It’s cheaper to buy than it was a year ago

This is the case if you’re looking to buy a flat or maisonette, according to the Office for National Statistics. Over the course of 2018, apartment prices dropped by 0.4%. Official data shows that the cost of buying a flat at the end of last year was £226,247, which was more than £800 less than the year before. There could be many reasons for this price drop, including hesitancy over Brexit and what leaving the EU could do in terms of interest rates. There has also been a significant slowdown in landlord purchases of properties as fewer investors buy apartments to rent out. This reduction in activity comes in the wake of cut backs in terms of tax allowances for landlords, as well as new stamp duty charges.

First time buyers are older than they used to be

First time buyers in the 1960s were an average of 23 years old – today most are in their mid 30s. A deposit of around £12,000 (today’s money) could have purchased a first home 50 years ago. Today most first time buyers need at least £20,000. The current trend for older first time buyers means many of the more recent developments are designed around properties that are aimed at this older market. This is why we have seen a surge in popularity of small houses, as well as flats and maisonettes.

House price growth in general remains stagnant

According to the most recent statistics, house price growth in the UK is the slowest it has been since 2013. In December last year, house prices rose by 2.5%, which was a drop of 0.2% on the month before. London and the south east have been the areas where this price drop has been felt the most. However, there is evidence to suggest that the trend for small – or negative – growth is spreading into other areas of the UK. For example, prices in the north east increased by 1.7% in November 2018 but, by December, had fallen by 1%.

Surveyors and estate agents predict the worst

A survey by RICS found that estate agents and surveyors are not positive about sales volumes in the near future – this was a trend right across the industry. The volume of transactions anticipated by those surveyed dropped to -25, which is the worst figure since 2017. However, for the next three months sales expectations have fallen to -32% – that’s the lowest figure since the survey first began in 1999.

Everyone is putting their plans on hold

Perhaps unsurprisingly, the trend for both buyers and sellers in UK property is simply to cease any activity at all. With Brexit now on the horizon, hesitancy over the impact that this could have on property values has seen activity come to a grinding halt. However, many experts have said that – especially for buyers – this doesn’t necessarily need to be the case. Particularly for those who are looking to remain in a property in the long term now could be as good a time to buy as any other, as long as the price is right. The market would most likely bounce back fairly robustly from a Brexit-related price crash and so buyers planning to stay for more than a year or so don’t have that much to fear.

These are some of the key trends in UK property right now. The most obvious and dominant theme is one of hesitancy. As no one really knows what the effect of the next few months will be most people are taking a “wait and see” approach, which is reinforcing general sense of stagnation.

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Non Standard Finance makes a bid for rival Provident Financial

In a move designed to create a “market leader... You're reading the blog post Non Standard Finance makes a bid for rival Provident Financial that was written by and first published on Getting Loans and Credit & Managing Money.

In a move designed to create a “market leader in non-standard finance,” sub-prime lender Non-Standard Finance (NSF) has made a takeover bid for Provident Financial. What’s surprising about the step is that NSF is the smaller of the two rival enterprises and its ambitious, strategic move has not gone unnoticed. Provident Financial is not currently in great shape, as it is experiencing the fallout from an attempt to restructure a century-old business model with more technology and fewer staff. The larger lender has so far refused the offer from NSF, calling it “strategically and financially flawed” but that may not be the end of the story. Provident Financial’s problems began in mid 2017 and that year it declared a loss of nearly £150m. It’s share price collapsed on the back of the failed reorganisation and its share price has not yet recovered.

Who are the rival lenders?

Non-Standard Finance. Established in 2015 and now the third biggest home credit lender. NSF offers home credit (“Loans at Home“), bad credit personal loans (“Everyday Loans“) and guarantor loans (“George Banco and “Trust Two“). Expansion in the years since the business was established has seen it go from strength to strength. The current top man at NSF is John van Kuffeler who was formerly chief executive and chairman of Provident Financial.

Non Standard Finance logo

Provident Financial. A well-established lender (created in 1880) with more than 800,000 borrowers committed to doorstep loans repayments. The business also includes Vanquis Bank, which offers a credit card with a 69.9% interest rate. The larger lender has been struggling as a result of a number of key factors, including a difficult recent restructure and regulatory sanctions. The business’ Moneybarn arm, which handles car finance, is currently being investigated by the FCA. The regulator is looking at the way it treats borrowers who miss repayments. Vanquis has already been ordered to pay £168.8m in compensation and a £2m fine as a result of a previous investigation into failure to disclose certain charges. Provident Financial logo

The takeover bid

The bid made by NSF has been backed by shareholders with more than 50% of Provident Financial’s shares. It’s not the first time that a takeover has been launched, as NSF made a previous attempt in 2018. Then, too, Provident Financial rejected the offer but conditions have not significantly improved for the business since then. It’s as a result of this further perceived slide in performance that representatives of NSF have said they feel the rival lender has “lost its way,” justifying a fresh takeover bid in 2019.

Under the terms of the takeover bid, Provident Financial shareholders would receive 8.88 new NSF shares for each Provident share. The offer has been rejected by Provident Financial management, which has made clear that it doesn’t believe this represents a true value of the company. Although it has suffered a 76% drop in share value in less than two years, those in charge at Provident Financial still sees to believe that the deal isn’t a fair reflection of the business. In fact, the offer made by NSF was described by representatives of Provident Financial as “irresponsible” particularly as the business has recently been destabilised by its financial restructuring. They said a takeover could put at risk the progress that the company has made towards sorting out the myriad of issues that have overwhelmed it in recent times.

Also problematic to the target company is a proposal in the takeover bid to dispose of Moneybarn and sell off another arm of Provident Financial – its online Satsuma business. Provident chairman Patrick Snowball said, “this Offer does not reflect that times have changed and ignores the significant progress we have made with our customers, staff and regulators over the past 12 months.” However, this perspective was dismissed by John van Kuffeler who has made it clear he feels that the issues Provident currently has are not reversible other than by this kind of drastic action.

What’s the situation now?

Currently, the takeover bid is being publicly rejected, not just on the basis of the value offered, but also with respect to suggested takeover strategy. Investors still have to vote on whether to approve the deal but given that just over 50% of the shares are owned by three big investors  – Invesco, Marathon and Neil Woodford – there is already significant backing in place.

For consumers, the real question is whether a “market leader in non-standard finance” would be beneficial or whether this would create fewer opportunities for broader access to credit. Unless – or until – the proposed takeover happens there will be little certainty on what the doorstep loans market in the UK is going to look like in the near future.

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Electric cars really are now cheaper than petrol & diesel to own and run!!

Electric cars are the environmentalist’s dream. However, they have... You're reading the blog post Electric cars really are now cheaper than petrol & diesel to own and run!! that was written by and first published on Getting Loans and Credit & Managing...

Electric cars are the environmentalist’s dream. However, they have long been viewed as a great option only for those who have the money to pay the increased costs of owning one. Now, a new study has revealed that these costs have dropped so far that we may already be at the point where electric cars are cheaper to run than petrol or diesel alternatives. If that’s the case then isn’t it time we all went electric?charging your electric car

Are electric cars really cheaper?

Research carried out by the International Council for Clean Transportation (ICCT) established that, over a four year period, it’s cheaper to own an electric car than a diesel or petrol model in five European countries (including the UK). The cost effectiveness of plug in vehicles comes from a combination of factors, including the price of fuel, government subsidies that are available on the cost of buying the car, as well as the lower taxes that apply to electric vehicles. The study focused on the VW Golf, comparing its electric, hybrid, petrol and diesel models. In what may come as a surprise to many motorists, it was the electric version of the VW Golf that emerged as the cheapest car to own and run. This isn’t the first study to identify electric cars as a cost effective choice. In 2017 University of Leeds research established that, in terms of depreciation and fuel costs, electric cars cost less. It assumed that car finance costs were unaffected by the choice of fuel type.

How about maintenance costs?

Another study carried out by automotive data experts Cap HPI focused on maintenance costs for all vehicles and once again established that the electric car is cheaper. Maintenance costs for a Renault Zoe, for example, amount to £1,100 over three years. However, in the same period the Vauxhall Corsa 1.0T 90 costs nearly £1,500. There are a number of reasons why maintenance costs can be lower for electric vehicles, including:

  • Electric cars have fewer moving parts than petrol or diesel vehicles so there are fewer elements to maintain
  • Driving styles tend to be less harsh for electric vehicles, which prevents wear and tear to key components such as the tyres
  • Electricity is a cleaner fuel than petrol or diesel, not just for the environment but the internal workings of the vehicle too

The cost of fuel

Many potential electric car buyers say they are concerned about the cost of running an electric car in terms of their annual electricity bill. However, it seems that here too there are opportunities to make savings. World Wide Fund for Nature research found that, while the average motorist spends £800 on fuel a year, an electric vehicle will add just £175 to the average electricity bill. If charging is done outside of peak times or using smart charging methods this can be reduced to just £100 a year.

What about the hybrid?

Many car owners nervous about making the switch to an electric model consider a hybrid car instead. However, the ICCT study showed that this option can actually be the most expensive of all. This is partly due to the fact that hybrid vehicles don’t get the same discounts as a pure electric car and also that they effectively have two engines so ongoing costs can be much higher.

Are we buying electric cars in the UK?

Sales of electric cars in this country increased by 21% in 2018 while diesel car sales fell by 30%. However, while there is clearly more interest in owning an electric vehicle, the increased sales still only amount to a 6% market share. This is in comparison to diesel vehicles which, even after a drop in sales, still make up 32% of the market. Most predict that demand for electric vehicles will continue to rise as more and more consumers tap into the cost, as well as the environmental, benefits. However, there is one obstacle: insurance. Currently, insurers charge more to cover electric cars than their petrol equivalents. Until that changes, electric vehicles won’t be cheaper to run across the board.

Electric vehicles represent an opportunity to make real, lasting changes to our transport habits. Not only do diesel and petrol vehicle emissions contribute significantly to global warming but they are at the root of the problem that many of our towns and cities have with air pollution. According to the World Economic Forum, 92% of the world’s population lives in a location where air pollution exceeds safe levels. In the EU it’s the cause of more than 500,000 early deaths every year. With technology now enabling electric vehicles to go further and cost less, the future for motorists worldwide is looking increasingly emissions-free.

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How the Government’s Help to Buy scheme can help you onto the property ladder

Help to Buy now has five years of history... You're reading the blog post How the Government’s Help to Buy scheme can help you onto the property ladder that was written by and first published on Getting Loans and Credit & Managing Money.

Help to Buy now has five years of history when it comes to supporting buyers looking to get onto the property ladder. The scheme was set up back in 2013 and, according to official records, has now enabled 494,108 properties to be purchased. Those who have benefited most from the scheme are first time buyers not looking to buy in London. For anyone currently struggling to get onto the property ladder, Help to Buy represents a chance to reach out for a helping hand.the property ladder

Help to Buy – the options

Currently, Help to Buy support is available as one of three options: the Help to Buy ISA, the Help to Buy Equity Loan or Help to Buy: Shared Ownership.

Help to Buy ISA. A savings scheme topped up by the government. A 25% bonus is paid on top of whatever is saved towards buying a first home, up to a maximum of a £3,000 bonus. Individuals can deposit an initial lump sum of up to £1,200 and then after that save up to £200 a month. A Help to Buy ISA is opened with a bank or building society offering this product. When the time comes to purchase a property, the conveyancer or solicitor is instructed to apply for the bonus amount.

  • Who can use it? The Help to Buy ISA is directly targeted at first time buyers. It applies to individuals, not households, so two first time buyers making a purchase together could each add their own bonus to the pot (i.e. £6,000 not £3,000).
  • Other conditions. Buyers must save a minimum of £1,600 before any bonus will be paid out. Below this there is no eligibility for the additional 25%.
  • Is this the right option for you? Yes, if you are not yet ready to buy but are looking for a way to optimise your savings. It’s also ideal if you’re purchasing with another first time buyer.

Help to Buy Equity Loan. Buyers can purchase with just a 5% deposit. The government provides an equity loan of up to 20% of the purchase price so that the buyer requires a mortgage of just 75%. There are no fees to pay on the equity loan within the first five years of using the scheme. An equity loan of up to 40% of the purchase price of the property is available to buyers in London, reflecting the significantly higher property prices in the capital.

  • Who can use it? First time buyers are eligible for the equity loan scheme as well as existing homeowners who want to move. The scheme is only available to people who don’t own any other property.
  • Other conditions. The property purchased must be a new build worth £600,000 or less. Homeowners who use the equity loan scheme cannot rent out the property.
  • Is this the right option for you? Yes, if you don’t have enough saved for a full deposit but can provide 5% of the purchase price. You’ll still need to have enough income and a good enough credit score to successfully apply for a 75% mortgage.

Help to Buy: Shared Ownership. Available for new build homes or existing properties offered through resale programmes from Housing Associations. Anyone looking to use this scheme must have household income of less than £80,000 a year (£90,000 in London). Purchasers buy between 25% and 75% of the value of the property and then pay rent to a Housing Association on the rest.

  • Who can use it? First time buyers, anyone in an existing shared ownership arrangement. It’s also available to buyers who used to own a home but can’t afford one now.
  • Other conditions. Shared ownership properties are always leasehold.
  • Is this the right option for you? Yes, if you meet the eligibility criteria and don’t mind only owning a share of the property.

A note about stamp duty

Stamp duty is a tax that is payable on every property purchase. However, if you are a first time buyer then you may be eligible for relief. As of November 2017, first time buyers purchasing a new property don’t have to pay stamp duty on any amount under £300,000. If the property is worth more than this, 5% stamp duty is payable on the amount between £300,000 and £500,000. There is no relief available over £500,000 so regular stamp duty rates apply. For the average first time buyer purchasing a property worth £300,000 or less, this represents a potential saving of up to £5,000.

Getting a foot on the property ladder has become notoriously difficult thanks to a shortage of homes and high prices. However, if you’re eligible for Help to Buy – and you find a property that works for the scheme – there are many more options available.

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How to prepare yourself for Brexit Day

It’s difficult to believe it but Brexit is (probably)... You're reading the blog post How to prepare yourself for Brexit Day that was written by and first published on Getting Loans and Credit & Managing Money.

It’s difficult to believe it but Brexit is (probably) now only a matter of weeks away. As the 29th of March (probable departure date) approaches, we still don’t have a very clear picture of what life is going to be like after the UK departs the EU. However, despite this, it’s becoming increasingly important for everyone to be prepared. Whatever your income, occupation or family situation it’s likely that leaving the EU will adversely affect some aspect of your life. So, how can you prepare your household for Brexit, whether it ends up being a no deal or not?

Brexit Day March 29 2019Brexit Day (29th March)

This is the official leave date for the UK to break up with the EU, subject to any final agreed delay. On the day itself, asssuming an “orderly Brexit” , – and in the immediate aftermath – nothing significant should change if you’re not leaving the UK. The EU Withdrawal Act 2018 sets out that, whether there is a deal in place for Brexit or not, the same rules and laws will apply the day before and after the exit has taken place. Significant changes, it says, will be then agreed over time. However, the UK government is not entirely in control of how the exit from the EU pans out – much of this depends on EU countries and whether they will continue to keep importing and exporting, as well as overlooking details such as travellers using British driving licences. The government has emphasised that its focus is on stability. However, it has stated that its “continuity approach does not mean that everything will stay the same.” Instead precautions have been taken to allow for a period of transition. For example the Temporary Permissions Regime enables EU firms and funds passporting into the UK to still deliver services in the UK for a temporary period. So, initially at least, regular consumers aren’t likely to notice too much change.

A “disorderly Brexit” (the no deal Brexit which people talk about) where the UK crashes out without a deal will be much more damaging. This is why some politicians are seeking to get this option removed from the table. If a no deal Brexit occurs then expect highly disruptive customs checks leading to shortages of some fresh produce, food price hikes, and a fall in the value of sterling. It could even trigger a recession.

Do we need to start stockpiling?

Around 300 readers recently contacted a national newspaper to say they had started stockpiling food. This was after the National Farmer’s Union said that the UK could actually run out of food in a year after Brexit (if the government is not able to maintain the flow of goods). However, the risk of services failing or supplies running low is relatively low. So, for now at least you don’t need to stockpile beans, start your own small farm in your suburban garden or – as one spoof article suggested – conserve your toilet water and recycle it for use elsewhere in the home. However, there are some steps that anyone can take right now to help prepare a household for Brexit, despite the fact that none of us currently know whether that will be with a deal or without.Stock pile food ready for Brexit

What To Expect After Brexit Day

  • Foreign currency. One of the ways in which the Brexit vote had a big impact for British consumers was on currency. The pound has fallen substantially against the Euro in the wake of the 2016 referendum and could experience another crash after the actual exit takes place. The most immediate impact of this will be felt by anyone looking to travel to the EU – holidays are likely to become more expensive this year – or those buying from, or selling to, countries within it. If you’re concerned about the impact of this change then buy your currency or book your holidays now.
  • Interest rates. In November 2017, the Bank of England increased interest rates for the first time in a decade. Another rate rise has been forecast for as early as May this year if inflation and UK currency take a hit. Another rate rise will positively impact savers but not those with mortgages or unsecured debt. If you want to mitigate the effects of interest rates then now is the time to remortgage or clear your debts.
  • Although most experts agree there isn’t an imminent need to start stockpiling supplies there is a chance that the way we buy food may need to change after Brexit. Currently, around 30% of the food consumed in the UK has been imported from another EU country. 40% of the vegetables we consume here have come from the EU and 37% of the fruit. If you’re a fan of bacon then it’s worth noting that 55% of pig meat comes from the EU. While supplies are unlikely to run dry – especially as the government is rumoured to be urging food companies to stockpile ingredients – it’s possible that prices will increase. So, bacon, for example, could soon become a product that is just too expensive for the average household. Sugar is another ingredient that might be in short supply after Brexit as the UK only produces 900,000 tonnes of refined sugar a year. If food supplies are of serious concern to you then you could consider freezing your favourite imported products.
  • Energy supplies. Although there have been whispers about an energy crisis after Brexit this is unlikely to happen. It’s true that the UK imports 36% of its energy from overseas but that isn’t all from the EU. What may have an impact on energy is the fact that we’ll be leaving Europe’s internal energy market as we step out of the EU. The effect of this could be an increase in the cost of electricity. For anyone very concerned about the implications of this, a back up generator is a good idea to cope with both energy shortfall and price increases.Stock piles of key medicines
  • Perhaps one of the post-Brexit supply chains that has caused the most concern is pharmaceuticals. Without a deal in place there could be difficulties getting certain medical supplies into the country and we don’t currently have sufficient volume for our own population within the UK’s borders. There’s not a lot that patients can do about this, as the NHS won’t allow anyone to start stockpiling drugs. However, most big drug companies have already take steps to ensure that their product can get into the country no matter what is happening politically – and they are allowed to stockpile. Plus, this is one area where the government has been very proactive to make sure that shortages don’t arise – apparently planes have already been chartered to ensure that essential medicines can be brought into the country where necessary.

Preparing financially for the impact of Brexit

It’s household finances where most people are concerned about how Brexit is really going to affect them. So, what can you do now to protect yourself and your loved ones as far as possible?Brexit and your personal finances

  1. Review your investments. Although no one can predict what the stock market will do with great accuracy, if you’re investing in companies that are likely to be impacted by UK-EU relations then your investments are higher risk.
  2. Get to know your pensions. As a result of the above, find out where your pension funds are being invested to understand how much risk exposure there is in the event of a difficult Brexit.
  3. Re-evaluate your weekly shop. Start looking at the labels of what you purchase and find alternatives that have been grown locally or in the UK. If there are EU made products you don’t want to have to pay more for after Brexit then it might be a good idea to buy a small supply now. Three-month’s worth should give the dust time to settle.
  4. Tighten your belt. Life could become more expensive for all of us post-Brexit. So, now is the time to reduce spending and start putting away more cash for a “rainy day.”
  5. Clear some debt. If you have multiple credit sources, identify the one with the highest interest rate (e.g. credit cards) and try to clear some of this before March 29th. This will help to reduce the exposure that you have to an interest rate rise if it comes at any point this year.
  6. Buying or selling property. There is no clear way to deal with Brexit uncertainty when it comes to property. Some advocate buying now, others say there is a crash coming after Brexit, which will create some fantastic deals for buyers. If you’re selling a property then many experts advocate waiting until Brexit has passed in case the property just gets stuck on the market as buyers are too cautious to make big decisions before April this year.
  7. Create a financial plan for the year. As in any situation of uncertainty, having a plan not only helps to achieve objectives but can also reassure and make you feel more confident about the future. Include a budget that is likely to be realistic no matter what type of Brexit we end up with, a schedule of debt repayment and ideas for generating income so that you can increase savings if interest rates do rise etc. Make a list of all the factors that could potentially negatively impact you financially, as well as any possible opportunities.

Given how difficult the government has found it to establish any clarity when it comes to Brexit, it’s not surprising that consumers are struggling too. Although there are no definite solutions to the Brexit issue these are some of the steps you can take to ensure you have a fighting chance.

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What is the Financial Future of MIllennials?

If you believe the media hype, millennials are both... You're reading the blog post What is the Financial Future of MIllennials? that was written by and first published on Getting Loans and Credit & Managing Money.

If you believe the media hype, millennials are both the best and worst of generations. They are those most likely to struggle with cash, as well as those with the potential to be the wealthiest. According to some news outlets millennials have the most trouble getting onto the housing ladder – others say that it’s because of this generation that home ownership, as well as other institutions like marriage, are dead. But what’s the truth when it comes to millennials – especially millennials and money – and what are the true financial issues that this generation faces?

Millennials and their social life

Are you a Millennial?

Millennials are most often defined as the generation born between 1981 and 1997. So, there’s no doubt that many of the financial and employment issues that often affect this generation have arisen as a result of the financial crisis that followed immediately on from 2007. For many millennials their formative coming of age years were spent in times of great financial uncertainty and categorised by a lack of opportunity.

The financial issues that Millennials face

More debt than other generations. Millennials have much higher levels of debt than the generations that have come before. Attitudes to debt have changed substantially to those of Baby Boomers – it’s now much more socially acceptable to be in debt and much more a part of financial life. And then there’s education. The millennial generation didn’t have access to student grants – only loans. So, 33% of millennials had a student loan in 2017, as compared to 20% of Generation X 14 years ago. Plus, student loans are larger – the average millennial student loan balance is double that of Generation X. As a result, before many millennials have even entered the “adult” working world they are saddled with significant negative balances.

Less likely to be on the housing ladder. According to the Office for National Statistics, home ownership among 22- to 29-year-olds has taken a huge dive in the past decade. In fact, since 2008 the number of millennials with a foot on the housing ladder has fallen by 10%. According to estimates, around a third of millennials are unlikely to ever own their own home. This is perhaps not surprising given the sizeable debts that many millennials graduate with. Another factor is the huge increase in property prices that is way out of line with wages. Today the average property price in the UK is £225,621. The average salary for a 30 year old is £23,700. As most mortgage lenders will only offer up to four times salary, this means that the average 30 year old can’t afford the average property. And given that rents increase year on year there are fewer opportunities for those in this generation to save for a mortgage deposit.

Millennials and debt

Lower savings. Frivolous spending and a lack of understanding of the value of money are often accusations laid at the door of the millennial generation. However, it’s also worth noting that high levels of debt, as well as lower wages, could also be to blame for the fact that many millennials have not been able to put money aside for the future in the same way as previous generations. This is a trend that is burgeoning as we speak. In just four years, the number of people in their 20s with any savings at all dropped from 59% to 47%. However, it’s not all bad news on the savings front. Those millennials who have been saving have managed to amass more than they would have done a decade ago. Although the number of people with savings has dropped, millennials who do having savings now have an average of £1,600, up from £900 10 years ago. There is huge disparity in this generation among savers – those who have saved the most might have up to £15,000 whereas those with least could have as little as £100.

Outgoings are a burden. In 2017, British households spent more on outgoings than they had coming in according to official figures. In fact, they were spending £900 more than their income. This was the first time that this had happened in 30 years. General consumer attitudes are changing and, with debt much more widespread, we are seeing less frugality than previous generations may have displayed. However, this is not some inbuilt flaw of the millennial generation but much more likely to be the financial environment in which they were raised and currently exist.

Job security has changed significantly. It’s no secret that we no longer live in a world where anyone can rely on something like a job for life. However, many millennials stay in jobs that they are just not happy in – in fact 33% will do this because they don’t believe that there is anything better out there. Within the same generation there are those who are juggling multiple roles – this generation is the mainstay of the gig economy. Many millennials have a second job. Some of the most common of these jobs include influencer marketing, selling items on eBay and dog walking. These extra jobs boost millennial incomes by 20% a week but mean that 45% tend to be working for more than 40 hours a week.

Millennials at work

Not financially robust. 25% of 18- to 24-year-olds and 50% of 25- to 34-year-olds are not financially robust. So, in the event of a personal financial crisis – or another recession – this generation is very vulnerable. Wage growth has been weak in recent years and this is a very divided generation in terms of income. The top 10% of millennial earners is bringing in more than four times as much as the lowest earners. Many young people today are disappointed when it comes to income, which does not measure up to expectations. Around 50% of 16 to 17-year-olds expected to earn £35,000 by the age of 30 but the average salary for a 30 year old is £23,700. There have been some very real reductions in wages for this generation too – between 2007 and 2014, millennials experienced a 13% drop in real hourly earnings.

Bad habits. As well as being more open to getting into debt, millennials have more bad shopping habits. For example, 95% of millennials who took part in one survey admitted to impulse buying. One in five said that they were making impulse purchases every day. With the average impulse buy at £38.33 this soon mounts up over several days or a week. The UK as a whole has a bit of an issue with impulse spending and this seems to be particularly acute for millennials. Whether it’s the result of advertising exposure or being constantly online and able to shop, it’s clearly something that many young people struggle with.

Lack of provision for the future. In addition to very low levels of savings, retirement is a thorny issue for millennials. According to a recent report, the average person requires around £260,000 set aside for a comfortable retirement. But many millennials are simply not putting aside enough cash for those golden years – because after rent and bills there is just nothing left. It doesn’t help that pensions are more complex than they have ever been either. 53% of millennials struggle to understand their workplace schemes. Millennials are putting at least some cash into pension savings – according to Prudential seven out of 10 under 35s are saving into a pension pot. However, at least a quarter of these believe that they simply don’t have enough saved for retirement and those who aren’t paying into a pension have no financial provision at all.

Millennials and entrepreneurism

It’s not all bad news

Although it may seem a rather bleak picture for this generation, there are some positive points to note. For those with a deposit ready, if Brexit hits house prices as expected, this could make property a bit more affordable for a few people. There are also many financial products out there that are available to millennial consumers who are looking to save. From ISAs to apps that automatically transfer available cash into a savings account, this generation is the first to have the full support of technology when it comes to improving financial health. Wage growth has also started to pick up so there are opportunities for those on tight budgets to find a little more wriggle room in the monthly accounts to start creating savings.

Millennials aren’t viewed as having the best relationship with money. Many have had a difficult start, perhaps graduating with large debts or struggling with the balance of incomings and outgoings that is required to ensure personal finances are healthy. However, there are some signs that this generation may bounce back, in particular the willingness to learn and evolve and to use technology to help advance finance progress. In another 10 years, when the next generation is firmly in the spotlight, it could be a totally different story for many millennial adults.

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