On 2 May 2019, the FCA published Discussion Paper 19/2: Intergenerational differences (DP19/2). In DP19/2 the FCA presents data on demographics and socio-economic trends to help identify the financial needs of three generations of financial services users: Baby Boomers (born 1946 – 1965); Generation X (born 1966 – 1980); and Millennials (born 1981 – 2000).
Specifically, in DP19/2 the FCA:
- uses Office for National Statistics (ONS) data to identify how people’s patterns of wealth accumulation and decumulation have changed in the last decade;
- provides broader observations about the financial lives of Millennials, Generation X, and Baby Boomers;
- discusses the socio-economic drivers that have contributed to these changing patterns;
- considers the implications for consumers and for financial services markets; and
- asks for feedback on relevant regulatory areas that the FCA may want to consider.
The FCA’s initial findings on intergenerational differences in financial needs suggest the following implications:
- due to changing housing and labour market circumstances, young people may require greater flexibility in their mortgage and credit products, whereas older generations may benefit from more innovative products meeting their need to maintain living standards in later life;
- many workers, especially the young, are not saving enough money for retirement. They would benefit from services helping them to engage more with long-term pension savings; and
- the use of consumer credit has increased in the last decade, probably also due to the low cost of borrowing. Recent developments in the labour market may mean that growing numbers of people – especially younger generations – may need access to credit to smooth their spending in the very short term.
The deadline for comments on DP19/2 is 1 August 2019.