The millennial generation is one of the least financially resilient groups in the UK. 7.8 million millennials do not have savings or investments in place to help them achieve their personal ambitions. Recent research from YouGov for KPMG has shown that 42% of millennials say that debt repayments form a significant portion of their outgoings, and one in five members of the demographic spend over 60% of their income on the same day it enters their account.
Millennials undoubtedly form a large consumer base, so what are the best strategies to employ when collecting debt from them?
Contacting Millennials
The millennials are those people born between 1981 and 1996. Though the traits of millennials differ by region, understanding how millennials communicate is the key to successful debt recovery from this demographic. This is a generation who grew up with the internet, they’re tech savvy and they enjoy receiving communication via channels they’re familiar with. Your focus should be a digital mind-set. Instead of sending letters and making phone calls, debt collection software that utilizes online messaging platforms, emails, WhatsApp and texts will reap greater rewards. Millennials can settle their debts using channels they’re familiar with, on their own time. You will experience greater success rates using this method.
How Do Millennials Handle Debt Differently?
According to data from the Office for National Statistics (ONS), the average weekly earnings are still £18 lower than their peak before the 2008 financial crisis, and this long term stagnation has hit millennials hardest. Further ONS analysis published last year indicated that home ownership among 22-29 year olds in the UK has fallen 10% since 2008, meaning just 27% have made it onto the property ladder. But interestingly millennials seek credit less often than other demographics. Their lack of eagerness to obtain credit liability arguably comes from the suspicions millennials have about banks, and also the larger credit framework itself after the 2008 financial crisis and the subsequent recession.
Rising house prices, in addition to Millennial’s tendency to not take on debt, has led to many of them still living with their parents. In fact 32.1% of millennials live with their parents. From a debt collection and debt recovery perspective, these living arrangements can have a challenging logistical impact. The millennial who owes debt may not be named in public addresses or phone records, and so establishing contact with them can sometimes be difficult.
However not all is lost, as most millennials can be discovered from their strong digital footprint. By researching social media sites, collectors may be able to locate a missing debtor and find an effective way to communicate with them.
The millennial generation is unique, and collection strategies aimed at their debt recovery need to be nuanced and outside of the traditional debt collection norms. To learn more about how Lateral can help you develop an innovative debt collections process, which is results-focused and highly effective, get in touch today.