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SOS: Save our Solvency


A recent article in The Times caught my attention. Now I have to admit that the main reason for this is that said article featured the words ‘Baby Boomer’, as well as ‘Generation X’, and ‘Millennial’. It’s not very often that this generation gets a look in nowadays in the media, and so I was interested to see what the buzz was with the boomers.

In fact the article was a thoroughly interesting read about the huge generational differences between Baby Boomers, Generation X and Millennials when it comes to financial health. Although this is a topic which I believe I have a fairly good grasp of, and which is talked about widely in the media, the opening paragraph of the article was frankly shocking to read. It stated that data from the Financial Conduct Authority (FCA) in the UK has found that, “sixty-somethings are typically about £78,000 wealthier than their age group was eight years earlier, while forty-somethings are £28,000 poorer than their age group over the same period.”

The size of the gap between the average fortunes of the Baby Boomer versus the generations of babies produced by that boom is astounding. What’s even more concerning is that the gap has been worsening over time, and it is having a huge effect on the fortunes of these generations and, as a result, the retail industry and economy.

Whilst this doesn’t make for particularly uplifting reading for the younger generations, one thing that is really pleasing to note is that, according to the FCA, as a result of the findings, it is keen to start a conversation about how financial regulation may need to change to provide flex to the differing needs of generations. In fact, Rachel Griffin, a tax expert quoted within the article, has hailed the study as a ‘landmark moment’, and hopes it will encourage policy shifts on tax, social care and housing to address generational inequalities. To save the solvency of current and future generations, it is clear that such shifts are absolutely essential.

As the father of two boys both now in early adulthood, I can attest to the difficulties faced by them and their peers to simply gain a financial foothold in the world. Living in London to grow the UK Laybuy business over the past few months has opened my eyes to this even more. The UK capital offers the most attractive salaries, but at the cost of paying an epic proportion of this salary out in rent each month, making it difficult for even the most ambitious young people to live within their means, let alone to contemplate saving for the future. And aside from the impact that this must have on the financial health of individuals, the impact of generations of young people without the means to spend also has the potential to be catastrophic for British retail and the economy as a whole.

The difficulties experienced by younger generations, and by retailers in selling to them, were a large part of the motivation behind the development of Laybuy. Younger people often have little to no breathing space in their finances, meaning that when the need for bigger ticket purchases arises the choice has historically been to either go without (bad for consumers and for retailers), or to take out store and credit cards which can leave people vulnerable to debt spiralling (which many young people simply refuse to risk). We like to think Laybuy, which allows people to purchase items by paying a sixth of the price upfront and the remainder over five weekly interest-free instalments, is a contribution towards giving young people and retailers another choice when it comes to navigating these challenging financial times.

Of course, this is merely a helping hand and not the answer. A full solution to the challenges faced by these younger generations requires looking at the picture much more holistically. It is vital, not only for the financial health of individuals, but also for our economy at large that steps are taken to ensure that young people have the opportunity to prosper financially. If they are denied this opportunity, the impact will be felt across the retail industry and the economy.

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Gary Rohloff