Millennials only own half of what they use, according to research by Virgin Money.
A poll of 2,000 people aged 23 to 28 found that the ability to cancel rolling contracts, spread the cost of a purchase, and quickly sell unwanted items, means that this age group don’t have regular outright ownership of their belongings. Instead, the research found that many millennials choose to loan instead of own – with 30 per cent doing so because it gives them more freedom over their finances.
Referred to as the ‘hire power’ by Virgin Money, this choice not to spend on big purchases is helping millennials to manage their money. 30 per cent reported feeling in control of their finances thanks to the flexibility of making purchases without permanent ties or having to buy things outright.
Millennials are perhaps the savviest generation when it comes to money.
Of the millennials surveyed, 60 per cent subscribe to video streaming services such as Netflix or Now TV (which can be cancelled at anytime) and five per cent are even signed up to a dog borrowing site.
Louise Hodges, head of consumer communications at Virgin Money, said: “For too long millennials have been criticised for the way in which they live their lives and spend their money. We carried out this research to demonstrate that this new social trend and ‘try before you buy’ attitude enables younger generations to make smart decisions by experiencing everything life has to offer before making any long-term commitments.
“We’re calling this approach to life ‘hire power’ – millennials are choosing things such as where they live, career paths and cars based on experimenting with them first. Rent can be cancelled, which means people can move house or go travelling, and contracts can be changed at very short notice, resulting in increased cash to use or invest elsewhere.
“Millennials are perhaps the savviest generation when it comes to money and are establishing smart money habits early on in life.”
The study found that the average millennials has five monthly contracts, giving them a flexible financial lifestyle where they can own as many or as few possessions as they’d like.
Nearly half enjoy the freedom modern life gives them over their finances – welcoming the opportunity to avoid being ‘tied down’. 20 per cent say that they don’t worry about their financial situations and 57 per cent believe they are good at managing their finances.
And if you’re thinking that this means millennials have no hope of managing to save money you’d be wrong. They could save as much as £695 a year if they cancelled any of the monthly rolling contracts they’re signed up to.
The average millennial has just shy of £260 disposable income each month – but 60 per cent say they supplement their income through sites like eBay, Gumtree or Facebook Marketplace.
TV presenter Laura Whitmore commented on the findings: “As a millennial I can relate to the results of the study and the feelings of ‘hire power’ we have. I also think it’s really important for us to all talk about money more openly, and to feel empowered by our money.
“I’m definitely part of the hire power movement – I regularly rent clothes, which is great from both a sustainability and cost point of view and it means the items are continuously recycled.
“I’m a huge fan of beauty subscription services including Glossy Box and Birch Box, they make it a fun and easy way to try before I buy so I can find out which products suit me before splashing out on them.”
Hodges added: “It’s much easier to keep track of your spending now which helps with the flexibility which forms hire power.
“With online or phone banking, plus mobile apps, we’ve got all of our money-information right at our fingertips and it’s this generation which is the most savvy.”
For tips on managing your money, visit Virgin Money Living.