Issues

The General Election – where’s the App for that?

12 May 2017


Comment from Adrian Boulding, Head of Retirement Strategy at Dunstan Thomas

This General Election comes at a very poignant moment for Dunstan Thomas as we have just concluded a major research exercise into what Millennials want from Financial Services providers. We think we have uncovered some learning points which political parties, wanting to capture the Millennial Generation’s votes this time around, might do well to consider as they finalise their election manifestos this week. We expect to see some significant action being taken to capture the Millennial vote, particularly by the Conservatives as they are clearly playing catch up in this demographic.

Traditionally general election campaigns are targeted at older voters because the statistics show that older people are more likely to be registered as voters. And amongst those who have registered, the older ones are more likely to turn out on the day.

However, 8th June 2017 could be very different when you bear in mind how many Millennials Jeremy Corbyn mobilised to get himself elected as Party Leader just seven and half months ago. He reached out to young people who hadn’t bothered to vote in Labour leadership elections before and persuaded them both to turn out and to vote for him.

There is plenty of time for that sort of outreach work in this election too. The deadline to get on the electoral register is 22nd May, the deadline for postal vote applications is 23rd May. And if getting to a polling station is difficult for you, then the deadline to appoint a proxy to vote for you is 31st May. Take a look at the Labour Party website and you will find that it’s concentrating on getting people to register to vote, with actual Labour policies very much in the background compared to the importance of getting yourself on the electoral roll.

We’ve researched Millennials both face to face and online early this year, and the pattern we found was a very engaged group of people living life on multiple social media channels on their smartphone and expecting the sort of instant responses that mobile apps can deliver. We found that over three quarters of Millennials spend over two hours each day on their smartphone. The party that can adapt their campaigning behaviour to this new communication paradigm will do very well.

Some Financial Services companies have already adapted their communications to interact with Millennials better online. The days of sending a salesman round to talk face to face are gone. As well as being too expensive, they probably won’t be in! And telephoning them doesn’t replace that either as many Millennials don’t think the telephone is for talking on – their ringers are usually switched off. It seems to be only regulatory requirements that now require providers to send lengthy paperwork out to Millennials, and we know it’s a waste as they are unlikely to read it.

The way that companies handle complaints on Twitter is quite revealing. I quite often see angry tweets that tell a provider they have done something wrong and that the customer, trying to get restitution, has been hanging on the telephone for far too long. They are now venting their spleen on Twitter, and not surprisingly that tweet usually gets answered much more promptly, with a rather public apology and promise of action. Clearly, providers are already diverting resources away from telephone helpdesks and on to responding to customer issues trending on social media.

What anybody dealing with Millennials needs to realise is that whilst they are a generation with their own unique characteristics, they are well-integrated with their elders. Our survey found that 27% of them are still living with one or both patents, 6% are living with aunts and uncles and 5% are living with grandparents. And there is a degree of financial dependence too, already recognised by those marketing the new Lifetime ISA which can be aimed either its Millennial target audience or at Mum and Dad. Some LISA application forms already have a special section to cater for gifts from Mum and Dad.

We found that on average nationwide, Millennials expect 24% of the deposit for their first home purchase to come from the ‘Bank of Mum and Dad’. There is a regional variation to this, closely correlated to house prices. That important Mum and Dad contribution is highest in London at just over 30% and lowest in Northern Ireland at 15% where typically house prices are half the level of the rest of the UK.

Financial Services companies are increasingly spotting these family ties, and accounts can, in some cases, be linked so that any one member logging in can view account balances across the family. Some mortgage providers have products that allow Mum and Dad to use their savings as a temporary guarantee for their children’s mortgage payments.

Will politicians be able to tap into this seam with their election promises? Obviously, they need policies that will mean that both Millennials and their elders can prosper financially. So maybe we will see more by way of transferable allowances? We each now have our own individual Dividend Allowance, Personal Savings Allowance, ISA Allowance and Pensions Annual Allowance. Maybe these should be transferable around a family so that family finance becomes a team effort, with the allowances being used by different members, at different times, according to changing circumstances?

Adrian Boulding is Director of Retirement Strategy at Dunstan Thomas

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