It’s no secret that even before the pandemic millennials faced a very different financial landscape from their predecessors – with rising living costs, lower financial security and unprecedented levels of personal debt. The average student debt for a graduate in 2020 was £40,000, compared to less than £15,000 ten years before. Only 25% of graduates are expected to fully repay their loans in their lifetime. With increasing numbers in part-time or zero-hours contracts, the foundations of the millennial-driven gig economy were not ready to be tested as strenuously as they have. Putting it clearly, they were simply not ready for Covid-19.
Large sections of the gig economy have found themselves falling through the cracks exposed by the pandemic. Millennials in flexible work already faced lower job security due to the prevalence of non-traditional working arrangements. Coupled with lower levels of financial literacy, a lack of government support and industries that rely on part-time workers, such as hospitality, being ravaged by forced closures – it has been the perfect storm for millennials already struggling to stay afloat.
The problems facing millennials are numerous but not avoidable, or insurmountable. Many are in a state of fluid finance, with their money spread between a variety of accounts and a reliance on high-interest, short-term lending and financial stop-gaps to get by each month. A dangerous balancing act for those without fixed working hours or steady income. However, they are also a generation increasingly well-served by technology and have more access to products than ever before. UK fintechs raised £3 billion in funding in 2020 despite the overall economic challenges, highlighting that investors continue to value the scope for this sector and the impact it is making.
We give people the tools they need to improve their financial health, build their credit score and access affordable finance. As an ethically-focussed fintech, we are helping millennials say goodbye to the high-interest, high-risk lending that has previously been detrimental to long-term financial health. More than that, we are helping people to become financially independent, build their credit profiles and look to the future – so they have reasons to be more positive about their financial health. There is no quick fix to any of the financial issues that currently face millennials. To solve them we need to get to the roots. The pandemic has highlighted the faults of the modern financial landscape and we can no longer simply paper over the cracks. We aim to use the power of our technology to rebuild people’s financial profiles, giving everyone a stronger foundation to build a better future. It’s no mean feat, but we’re up for the challenge.
We also know that we can’t do it alone. Lots of other great companies are striving to help people in uncertain situations build a more certain future. There are services such as Collective Benefits, who are providing more insurance protection for modern workers faced with a lack of security, or Penfold who are offering pension management and advice specifically for sole-traders, freelancers and the self-employed. It’s a demographic that has massive untapped potential and, given the right opportunities, can flourish in years to come.
The unprecedented challenges of the pandemic have reshaped industries, workforces and the world as we know it. It has accelerated the shift to a digital-first economy, with millennials firmly at the centre. However, the problems they face will not go away. Now, more than ever, is the time to disrupt the cycle and bring about positive, long-lasting change. When applied in the right way, fintech can be a powerful force for good and we use it to help those left behind by traditional finance. Money is broken, we are going to help fix it.