Cents and sensibility: the millennials showing mid-lifers how to save

According to research from the Economic and Social Research Institute, women’s pensions are up to a third lower than those of retired men. Sobering news indeed and one which adds weight to the somewhat stereotypical view that many women are in denial about their financial future and, perhaps because they are too busy holding down a job and running a home, not preparing adequately for retirement.

Samantha Kelly, owner of Women Inspire Network, says she would be the first to admit to being terrible at talking about money.

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“I feel we behave how our parents did and having grown up in a big working-class family, we mostly lived week to week,” she says. “But thanks to social media and awareness via online articles, we are learning more. I was never good with finances, but when I started my business, boy did I learn fast.

“So now I pay bills on time and get great peace of mind knowing that a little bit put by can make a huge difference. And I always invite a speaker and do webinars around this topic for my Women Inspire Network.”

Many of us can relate to this, particularly if we are ‘mid-lifers’, but according to research from Revolut, seven out of 10 young adults are putting money aside for their future and, in essence, are more ‘savvy’ about their finances than they are often given credit for.

This could be due to the fact that they are more au fait with the internet and the ease of online banking, which allows them to transfer money from one account to another in seconds rather than having to fill out forms or worse, visit the bank manager in order to create and maintain a healthy savings plan.

Lorraine Donegan of Donegan Financial says this may well be the case as she finds that clients who like online banking “fully appreciate online access to their investments as it gives a sense of control and helps them keep track of their goals”.

“Many of the clients I deal with have watched their parents struggle during recession years, having not funded enough for their retirement, so I think a good proportion are more savvy as they don’t want to see themselves in the same position,” she says. “And in the last year, I find there are definitely more enquiries from female millennials for retirement savings – which is fantastic.

“Standard Life research shows millennials are saving more per month into pensions compared with the average pension saver – €177 per month compared with an average of €153, or 16pc more. This is a consistent finding over the last few years and means, in certain cases, millennials are saving more than their parents.”

Financial advisor John Lowe agrees that younger women are much more aware of their financial future.

“I recently reviewed the finances of a young woman of 26 and she was visibly upset when she realised she had missed out on her first two years of pension contributions!” he says.

Grainne McNamee from Belfast is another example of a financially switched-on millennial. Together with her husband, Ryan, the 33-year-old has managed to clear an €18,000 loan by giving up takeaways and rustling up batches of homemade meals, which cost just €2 a time.

“It wasn’t until I totted up the figures that I realised we were spending around £500 (€550) a month on food alone, which is a massive amount for just two people,” she said.

“So I set about learning how to batch cook, meal plan and started food shopping week-by-week instead of day-by-day, which is what we had been doing. I now cook up hearty, but healthy meals – [and] when meal planning, I usually make a mental note of one night where we will be eating leftovers, usually just before our weekly food shop.”

By making simple but effective changes to their eating habits, in just 12 months the couple had wiped out their entire debt.

Lynne Ward of female body-positive company Pepper Hustle can relate to this and says people her age seem to be more capable financially.

“I do believe millennial females are bucking the trend,” she says. “There has been a rise in independence of females within the household and equality within the workplace, and with this has come an awareness of future security, savings and investment opportunity.

“Making money grow used to be something that, traditionally, men were the skilled sex at doing. But nowadays, it isn’t uncommon for single females of our generation to own their own home or indeed have a few properties on their portfolio.

“Pensions were also something which weren’t really understood, but a newly educated workforce of females having graduated from university and going into full-time employment has increased not only the awareness, but also the understanding of the necessity to secure your financial future into retirement.”

Lorraine Donegan says because young people are more comfortable with online transactions, they also have instant access to the latest deals.

“With social media, there has never been more awareness on deals for lending – in particular, mortgages and low-cost banking, clients are definitely much more aware of rates and bank fees and are always looking for better value. And there is a difference – between baby boomers and millennials – in particular when it comes to retirement,” she adds.

“They’re savvier, want to start earlier, save more and are more willing to invest in higher-risk funds, knowing that in the long term, they will make a better return. Also, they want to avoid replicating the mistakes of their parents by saving early, enough and into the right investments. They’re not afraid like BBs, but I feel that’s a result of good advice and making educated decisions.

“Plus, technology has moved on so much, we can now provide clients with a cash flow analysis, giving them a clearer idea of how their investments will work for them in retirement. BBs were more trusting and, in my opinion, had fewer expectations of their advisor and didn’t ask as many questions, leaving for later disappointment with an underfunded pension.”

Norma O’Neill Collins of Fealeside Financial agrees and says women over the age of 35 should become more aware of the need to secure a decent pension.

“I’m concerned for those women between the ages of 36-55 who have a very small take-up on pensions,” she says. “Standard Life did a survey, which showed that only 24pc of women have pensions as opposed to 46pc of men – this is scary. It’s probably because women took time out from their career to mind family (children or aging parents) or some may have felt they could rely on their husbands’ pension.”

Lynne Ward agrees: “Women of our mothers’ generation weren’t openly encouraged to be independent, which is maybe why our generation are so adamant that there was a wind of change,” she says. “I want to have money to treat myself, I want to be safe in the knowledge that there’s money there if we ever need it.

“Let’s face it, we never know when that day may arrive. So it’s good to be prepared.”

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