Generation Lost

Generation Lost

Engaging Millennials with retirement saving | October 2015


Millennials face considerably greater challenges than their parents when it comes to providing for their retirement. But this group, which comprises those born between 1980 and the turn of the millennium, are not being told about the scale of the savings mountain they must climb.

In association with University of Cambridge Judge Business School

About the Research

The Generation Lost research was delivered in three stages.

  • A 30-question survey was published online and open for responses between July – September 2015. Over 1,200 Millennials responded from the UK, USA, Japan, Australia, Brazil and the Netherlands.
  • Interviews were carried out with a number of Millennials from each of the 6 countries via telephone or video call. Their reflections on the survey findings are included in this report.
  • A number of finance professionals and academics from around the world were invited to reflect on the survey results and to consider their views on the future direction of the insurance industry.




Financial services providers such as life insurers, banks and asset managers are losing the battle to engage with this generation of potential new customers. Senior executives within these organizations are guilty of the same short-sightedness towards the long-term health of the businesses they run as Millennials are towards their retirement saving.

Root and branch reform of financial education is needed to equip future generations to bear the increasing burden they will personally have to carry in providing for their retirement. Social Finance offers financial services providers a way to speak to Millennials in a way traditional investments do not. Financial services providers can better connect with Millennials by being more honest about the challenges they face. New ways of thinking are required if undersaving Millennials are not to become Generation Lost. READ MORE


Highlights from 'Generation Lost' Research



Executive Summary and Key Findings

Millennials in developed countries face a less comfortable retirement than their parents and their grandparents as a result of unstoppable demographic, political and macro-economic factors. Yet they are unaware of the future that awaits them.

Their understanding of financial matters is low, but that is as much as a result of their not being told as not being interested. They want to know the truth about what lies ahead, however negative it is.

46% of Millennials do not get any information on financial matters through their workplace or educational establishment

Understanding of key concepts such as compounding and tax-advantaged savings is low. Millennials massively underestimate the amount they will need to save to fund their retirement. An overwhelming 90% estimate the amount they will need in retirement by taking a blind or educated guess rather than base it on industry data. They want engagement in financial matters at key points through their lives, starting at school, across a variety of media, including face-to-face and digital channels.

77% want to be told the stark reality of their post-retirement finances and health, demanding more shocking messaging from insurers and other financial services providers

They want to be told the truth about just how poor in retirement they will be if they do not start saving for retirement early. They have grown up in a more protective environment than previous generations, and have overoptimistic expectations as a result. But they want to be treated like adults with more confrontational, honest and realistic messages about the challenges they face in providing for their retirement.

This demand for knowledge, which is clearly evident in each of the six countries across which this research was conducted, presents insurers and other financial services providers with both a duty and an opportunity – a duty to play their part in ensuring future generations do not sleepwalk into poverty in retirement and an opportunity to become Millennials’ partners in helping them transition into financially-literate, engaged savers.

Millennials would allocate an average of 42% of their portfolio to Social Finance products

Social Finance has a strong appeal to Millennials. Yet it is an option that is virtually inaccessible through today’s mainstream retirement savings products, which also fail to put the SRI options that are available at the front of the shop window. The research shows 95% of Millennials feel that pension funds and insurers only provide limited, poor or no options for investing in Social Finance products. Attitudes to Social Finance vary from country to country, but across the world this growing area offers a unique opportunity for financial services providers to connect with Millennials.

63% of Millennials would save more if their pension account allowed multiple withdrawals throughout their lifetime

As was shown in last year’s report, Millennials want products that offer support to more immediate needs as well as retirement funding. The most important life events for which Millennials would want access to cash through a multi lifetime withdrawal product are placing a house deposit (49%) or experiencing a major illness (48%).

It is a generation that wants financial services providers to tell it the truth, but whose needs the insurance industry is failing to meet ...

Paul Traynor, International Head, Insurance Client Segment, BNY Mellon


42% of pension portfolios would be allocated to social finance


This report suggests Millennials are not ignorant of the retirement saving challenges they face because they are not interested, but because they are not being told. But even if they were being told about products available today, interest would be suppressed because these do not meet their requirements for Social Finance or flexibility, and because they are not being marketed in ways they understand.

It is of course difficult for long-term savings products to compete with things that offer younger consumers more immediate gratification. But the research in this report contains a number of pointers towards new ways of reaching out to Millennials.


  • Financial services providers need to do more to promote financial education by partnering with grassroots financial education providers, engaging with schools and universities and lobbying national governments for change. Young people need regular engagement through multiple channels if they are to be equipped to deal with the challenges they face and provide for their own retirement.
  • Financial services providers should engage with Social Finance organizations and FinTech start-ups to develop their social investment credentials. This will involve financial services providers stepping outside their normal way of thinking, but is essential if they are to reposition themselves for the next generation of customers.
  • Existing SRI propositions should be revamped and put at the front of financial services providers’ offerings. SRI should be more actively marketed to Millennials. Just because existing SRI take-up may have been low until very recently does not mean this investment approach does not have potential, rather that it has not been correctly positioned in the market.
  • Financial services providers should make it easy for Millennials to allocate a percentage of their retirement savings to Social Finance investments. Percentage allocation of portfolios to Social Finance remains very far from being a mainstream activity.
  • Financial services providers should consider more shocking marketing campaigns to achieve cut-through with Millennials. Millennials’ unease that they are not being told the truth about their potential future poverty offers financial services providers the opportunity to be the bearers of useful information and assistance.
  • Retirement savings products that give access for life events need to be developed. Financial services providers should not only create them but also lobby their national governments to facilitate their development.


Social Finance: Opportunity to engage

Financial services providers need to do more to raise awareness of Social Finance investment options

Social Finance, and specifically the subset of socially responsible investment, carries a strong appeal for Millennials. The emotional power of Social Finance – which taps into the goodwill of people who want to invest in projects that serve social ends as well as generate positive returns – makes it better able to make an impression on Millennials than mainstream investment approaches. But they feel accessing Social Finance options is not straightforward.

Insurers and other financial services providers might accuse Millennials of saying one thing and doing another. They might cite untouched ethical and SRI options within existing product ranges as evidence that when it comes to the crunch, the vast majority are only interested in returns. SRI options are available, but we believe many financial services providers and other providers have not placed them squarely at the front of their offerings.

Financial services providers need to step out of their comfort zone when thinking about how to engage Millennials with Social Finance, particularly SRI, as it offers a unique option for connecting with Generation Lost.

  • Millennials surveyed would allocate an average of 42% of their portfolio to Social Finance products.
  • 47% would exclude pension providers who do not give them the option of avoiding negative social investments.
  • 38% would exclude a pension provider if it made no positive social investments available.
  • 95% of Millennials feel that pension funds/insurers only provide limited, poor or no options for investing in Social Finance products.

Grassroots credentials

Millennials clearly see Social Finance as something new, fashionable and speaking to them in language they understand. It speaks of a return to grassroots solutions, of bottom-up, tech-based financial innovations such as crowdsourcing and peer-to-peer lending.




The research contained in this report highlights just how different Millennials are in their attitudes to and understanding of retirement saving when compared to earlier generations. An overwhelming majority – 77% want to be told the stark truth about the challenges they face, yet 46% get no information through their workplace or educational establishment. They are demanding new products, that offer early withdrawal for key life events and they want to invest in a more ethical, socially engaged way, being prepared to allocate on average 42% of their portfolio to Social Finance projects.

This report proposes a number of ways in which financial services providers should change their approach to tomorrow’s high earners – a radically improved approach to financial education at all ages, a more honest dialogue with young people about the financial challenges they will face in later life, a new emphasis on investments that benefit the wider community and a fresh approach to product design that includes early access.

Implementing them will not be straightforward, but those financial services providers that adapt to their changing customer base can be sure they will be best positioned to thrive in future markets and continue to drive shareholder value.

About the Researchers

At the time of this research, Paul Kelly was reading a Master of Finance (MFin) degree and Shreetama Datta a Master of Business Administration (MBA) degree. Paul brought to the project a professional and academic background in strategy consulting, economics and finance, and Shreetama a professional and academic background in statistics and data analytics. Both were part of the University of Cambridge Judge Business School’s 2014-15 cohort.


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