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COVID-19 marks financial coming of age for cash-strapped Millennials

on 2 Dec 2020

Hardest hit by the crisis financially, Millennials are tightening their grip on their finances and preparing for the future

  • Millennials most likely generation to be pursuing a financial goal, such as saving more for retirement, investing better or improving how they track their spending
  • Despite 70 percent of Millennials finding it more challenging to manage their money day-to-day, 46 per cent have become more confident they can reach their financial goals, partly due to their uptake of digital money management tools
  • Over one-quarter have started using new money management tools, such as budgeting apps, during the pandemic to help them stay on top of their finances

NEW YORK, November 25, 2020 – COVID-19 has had a massive impact on the spending and savings of people across generations, but no group more so than Millennials, (those aged 25 to 44 in our poll), according to Standard Chartered’s latest global survey. Millennials are the most likely to be struggling to meet day-to-day expenses (41 per cent) and report higher levels of borrowing in the last month (35 per cent). Yet, faced with these challenges, the pandemic has galvanised this generation to better prepare for their financial future, encouraging Millennials to make changes to how they manage their money.

The study of 12,000 adults across 12 markets – Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, UAE, the UK and the US – is the third in a three-part series, looking at how COVID-19 has transformed consumers’ way of life, and what changes could be here to stay. While the first survey focused on the pandemic’s impact on earnings, and the second looked at changing spending habits, the final survey provides new insights into how the global health crisis has altered the way people are managing their money day-to-day, in pursuit of their long-term goals.

Almost two-thirds of people globally (64 per cent), found managing their money more difficult since the start of the COVID-19 outbreak, but Millennials (70 per cent) found it the hardest. They are 39 per cent more likely than those over 45 to feel they don’t have control of their bank balance, and 24 per cent more likely to have found meeting day-to-day expenditures, such as household bills, highly challenging. Meanwhile, 35 per cent of Millennials reported that their borrowing has increased in the last month, versus 24 per cent of those aged 45 or over.

Despite these significant challenges, Millennials are the most likely generation to be in active pursuit of their long-term financial goals. Globally, 33 per cent of them are saving for a major purchase such as a new car or home, compared to 18 per cent of those aged 45+, while 35 per cent are trying to save more for retirement, compared to 29 per cent of those aged 45+.

To meet these ambitions, Millennials are the most likely to want to better track and budget their spending (37 per cent). 42 per cent want to alter their daily spending and 30 per cent started using a new money management or budgeting app since the pandemic began, with 61 per cent of those who haven’t planning to do so in the next three years.

Of those who have used new ways to manage their money since the start of COVID-19, the majority of people have had a positive experience. In the markets we surveyed, 65 per cent of Millennials have enjoyed using these tools, compared to half of people aged 45+.

This embrace of new technology to help manage money amid the current economic turmoil may be why Millennials are more confident than any other generation that they can achieve their long-term financial goals. Almost half (46 per cent) are more confident than they were before the pandemic started.

Meanwhile, across all the generations, the pandemic has made people more careful with their saving and spending and less likely to splurge. When asked what they would do, if given the equivalent of £1,000 by their Government with no strings attached, the most common responses globally were to use the money to pay off debt, cover day-to-day expenses or save for the long-term. Respondents were least likely to spend the money on a holiday, either foreign or within their country.

Aalishaan Zaidi, Global Head Digital Bankingat Standard Chartered, said: “The scale of the current crisis has triggered Millennials to ‘come of age’ financially, with many now taking a hard look at their finances and taking more proactive steps to meet their life ambitions.

Millennials, indeed all generations, want more advice and education on how to manage their money with people now realising that being both financially and digitally savvy is a must. Banks have a key role to play in providing accessible advice and effective tools that empower people to plan for an increasingly unpredictable future.”

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Methodology

A 10-minute online survey of 12,000, 18+, nationally representative respondents across 12 markets – Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, UAE, the UK and the US – was conducted between Friday, 25th September and Thursday 1st October 2020.

Results are weighted on the latest national census in each market by age, gender and macro-region and should be considered representative of the online population.

To view the full report, of the three waves of survey this year, go to:
Future Money – How COVID-19 changed our financial habits

About Standard Chartered

We are a leading international banking group, with a presence in 60 of the world’s most dynamic markets and serving clients in a further 85. Our purpose is to drive commerce and prosperity through our unique diversity, and our heritage and values are expressed in our brand promise, Here for good.

Our history in the US dates back to 1902, and we are currently present in eight locations throughout the Americas. Our Americas franchise focuses on financial institutions and select corporates and plays a key role in facilitating trade and investment flows between the Americas and Asia, Africa, and the Middle East.

Standard Chartered PLC is listed on the London and Hong Kong Stock Exchanges.

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