Millennials Are Relying On Inheritance From Their Parents To Pay Off Debts
Debt from what, exactly? Millennials infamously can’t afford an abode of their own – destined to be perennial renters until they kick the bucket, no doubt choking on all those Pret sandwiches they’ve been buying against the advice of certain estate agents. Death by artisan falafel baguette – sounds about right.
But it’s not all about the current housing crisis – the Student Loans Company revealed two thirds of millennials will never be able to pay off the debt racked up whilst at university. This is apparently in part due to the fact that, once millennials actually leave the comfort of their uni halls and venture out into the big wide world, the dire state of the current job market means more than half the UK's graduates aren't in jobs that require degrees. Furthermore, the lack of affordable homes means that one in four people aged between 20 and 34 still live with their parents.
The one tiny ray of light millennials have to cling to is, as they struggle on in their rented flats and the jobs they’re over-qualified for, one day they’ll receive a substantial amount of money from their parents: new research from First Direct shows 66% of millennials expect to inherit some wealth from their family, with 43% planning on using the funds to pay of their debts.
The survey, which spoke to 2,000 people aged between 18 and 32, also revealed the average inheritance they hope to receive is around £80k, with a fifth admitting they’re worried their parents’ spending habits might make a dent in the amount they’ll get.
It all makes sense when you consider that even more depressing millennial research recently showed 31 is the most expensive age of your life (a surprise to absolutely no 31-year-olds). This is because it’s an age which usually contains the most milestones, such as having a baby, buying a house, or getting hitched. The survey of more than 3,000 people from credit-checking firm ClearScore showed saving for a wedding topped the list as the most expensive life choice, followed by their first home and giving birth to a little one – around £43,000 is needed to cover these costs, which is nearly double the average salary.
So it’s really no wonder that six in ten millennials claim to be going through a ‘quarter-life crisis’, of which the main cause is financial troubles – more than half said that they are repeatedly spending more than they earn each month.
“With three out of four millennials not currently saving on a regular basis and only one in two hoping to start saving in the next five years it’s no wonder financial difficulties are a major cause of quarter life crises,” Nick Harrison, Head of Products at First Direct, said.
Which means, of course, the use of credit has also increased from generation to generation, with one in five people under 34 using credit cards to fund big purchases, compared with just 8% of those over 55 years old. But while their spending habits seem to be very different, millennials and baby boomers can at least agree on one thing: young people today have a tougher time financially than the older generations, with 51% of 25-34 year olds and 57% of over-55s concurring on this. Well, we don’t call them ‘Generation Debt’ for nothing…
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