Only half of US Millennials think their primary financial institution will help them meet their financial goals next year
Amid continued inflation and market volatility, a new survey from personal banking and investment platform M1 of over 1,000 US Millennials finds that 71% would consider changing their primary bank or other financial institution for a higher Annual Percentage Yield (APY) on their cash savings – a figure that rises to 79% for those planning to retire early (before their 60s). For 40% of all respondents, an APY increase of less than 1.5% would be enough for them to switch institutions. Additionally, 31% of those surveyed are more likely to change their primary financial institution for any reason in the next 12 months than they were one year ago (only 10% are less likely).
“Millennials may have a reputation for prioritizing short-term experiences over long-term savings, but what we’ve found is that they are overwhelmingly ready and willing to make sacrifices for their long-term financial health”
As Millennials voice dissatisfaction with the options offered by their current financial institutions, they also plan to make day-to-day and long-term life changes in order to prepare for a more uncertain economy. Almost half of respondents state that this year’s volatile markets have impacted their expected retirement year, with 19% planning to push it back by 1-5 years and 15% planning to push it back by 6-10 years.
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Still, 37% of all Millennials surveyed say they plan to retire early. To keep their plans on track in the current market environment, they plan to save more than they typically would (45%), increase their incomes through an additional job or side hustle (42%), decrease their discretionary expenditures (35%) and invest more than they typically would (21%).
Overall, 93% of respondents plan to make some kind of personal sacrifice to weather the financial impact of the current economic environment, but only half (54%) think their primary financial institution is actively helping them meet their savings and financial goals for the next year.
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“Millennials may have a reputation for prioritizing short-term experiences over long-term savings, but what we’ve found is that they are overwhelmingly ready and willing to make sacrifices for their long-term financial health,” said Brian Barnes, Founder and CEO of M1. “What’s missing from their financial picture is a system of products that works as hard for that financial future as they do. The largest banks in the American financial system refuse to significantly raise savings rates to a meaningful degree because of the impact on their bottom line, even as inflation continues to grow and central bank rates continue to rise. They are betting on inertia to carry them through the next economic cycle, but our survey finds that consumers may not be willing to stick around this time.”
Methodology
This M1 survey was conducted by Big Village Caravan among millennials in the United States. A diverse group of over 1,000 millennials, age 26 – 41, were surveyed for the report, fielded throughout December 2022. For further details on survey methodology, please contact an M1 media representative.
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