Adhil Shetty is CEO at Bankbazaar.com.
India, the second most populated country in the world, is home to over 400 million millennials—those born after the year 1982. Today, these millennials form nearly half of India’s workforce. The Gen Y —those born after 1998— are increasingly emerging as the chief wage earners, and are also under the spotlight for their spending and investment patterns.
In this scenario, one may wonder what the millennial India aspires to be and how much they are prepared for it.
With the help of KANTAR IMRB, BankBazaar surveyed 1,551 millennials in India – salaried men and women between the ages of 25 and 35 – to understand their aspirations. The aim was also to view their aspirations through the lens of money management. The survey assigns numerical values to those aspirations.
We divvied up their aspiration into six broad areas –
This was based on the ‘Self-Determination Theory’, developed by Kasser & Ryan.
The survey revealed that India’s youth considers wealth as their most important aspiration, while health and fame follow in second and third places. While millennials have the impression being someone how don't consider long-term investments, an astounding 69 percent of millennials in the survey said they consider buying their own home as a top priority. Sixty-one percent respondents said they were comfortable taking loans to actualise their aspirations.
The aspiration index assigns a numerical value to the aspirations of the surveyed. Here are the scores of various demographics on the Index. Indian millennials overall scored 87.43. Millennials from South India stood well above their counterparts from other regions, scoring 88.5. Among all Indian cities, Chennai topped with 88.8. North India scored 87.7 (with Jaipur coming second to Chennai at 88.5), East 86.6, while West stood last though not too far behind at 86.0.
Women are More aspirational
Despite challenges, Indian women now have high aspirations and India’s millennial women are no different. The survey reveals that a large number of women are fulfilling their financial aspirations, making them rank higher on aspirations as compared to men.
India’s young women scored 87.43, the same as the national average, and marginally above men at 86.29. This shift thus hints at a remarkable change – millennial women have decided to own their aspirations.
Where do millennials invest
One may think that millennials would be inclined towards new-age investments, but the study shows that millennials are big on saving and investing in security investments like life insurance and health insurance. Almost 72 percent of the millennials interviewed said they held some form of life insurance and 57 percent held health insurance. The ratio of investments in fixed deposits (FDs) and mutual funds was very close with 57 percent having a FD and 56 percent holding mutual funds.
At the same time, long-term maturity products like Public Provident Fund (PPF) and pension plans scored low among millennials with 36 percent and 19 percent owning these products in some form.
Managing own finances
With many new-age financial instruments an astounding percentage of millennials, 91 percent of them said they manage their own finances, with the rest saying they entrust someone in their family or their chartered accountant /Relationship Manager to do the same.
Despite the clear aspirations, the goals also have an aspiration-readiness gap. This means that while millennials want to fulfill these aspirations, their readiness in terms of saving and planning is reflected in the gap. For instance, the top priority for a typical millennial is wealth, especially owning a home. However, this particular goal has one of the highest aspiration-readiness gap of 12 points. This means that while millennials want to own a home their readiness in terms of saving and planning is the least in this area.
The author is CEO at Bankbazaar.com.