Why Gen Z could be the perfect match for protection

Think back to 1997. It was a year of huge optimism and change. Tony Blair’s New Labour won a landslide general election victory ending 18 years of conservative governments. The UK economy was beginning to show signs of recovery following the recession in the early 90s. British music and films were on the rise. “Things will only get better” was the perfect anthem to describe the mood in the country.

Anyone born in 1997 became the first members of Gen Z, the youngest generation in today’s workforce. While they came into the world at a time of hope, by the time they began their careers, it had become a much more uncertain, insecure place.

Their thoughts and feelings have been shaped by major events such as Brexit and Covid. They have witnessed the middle east descend into turmoil, conflict in Ukraine and climate change beginning to seriously affect communities around the world. Only a quarter expect to see positive change in the country over the next year¹.

This is the generation that is concerned about the environment, mental health and the society they live in. While they want to make a positive change, there is only so much they can do at an individual level. It is easy to feel overwhelmed and out of control.

Given the environment they’ve grown up in, it is perhaps no surprise that Gen Z see the benefits in the security and certainty that protection products can provide more than older generations. The AMI Viewpoint survey 2023 - The Perception Gap, found that 78% of Gen Z respondents think it’s important to have protection compared to 66% of Gen X (those aged 42 to 58 years old) and just 58% of Boomers (those aged over 59 years old). 

It is not the world around them that is driving the interest in protection. This is the generation that is finding it harder than ever to get on to the housing ladder. In 1997, the average age of a first-time buyer was 26². The average cost of a first home was £59,587³. With an average yearly salary of £16,711⁴, owning a property was a realistic aim for many. 

Today, the picture is very different. The average age of a first-time buyer has risen to 34⁵. To get their property, they need, on average, a mortgage of over £200,000⁶ and an average deposit of £62,470⁷. They are required to do this when the average salary is only £34,963⁸. It is little wonder that most in this generation feel owning their home is a distant dream and rent their homes.

With rents rising by more than 8% in the year to August 2024⁹, four times the current rate of inflation, many are feeling the squeeze. More than half in Gen Z live pay cheque to pay cheque¹⁰, leaving no buffer if they were unable to work through illness or injury. Recent research by MetLife shows that 86% of renters were unsure about how they could afford their rent if they couldn’t work for three months or more. To find more security, it is easy to see how protection can be attractive to Gen Z.

Armed with this knowledge, it is up to providers to find an effective way to reach this generation and provide affordable, attractive options. This is the first digital native generation, they have grown up with the internet, smartphones and an expectation to get anything they want in just a few clicks. The industry needs to understand how young people consume media, the language they use and what they want from protection. Time spent doing this will ensure Gen Z can get the protection they need.

¹Deloitte Global 2024 Gen Z and Millennial Survey
²First-time buyer average age rises eight years since 2007 (mortgagesolutions.co.uk)
³History of house prices in Britain | SunLife
⁴UK full-time weekly salary 2023 | Statista
⁵UK First-Time Buyer Statistics 2024 | Uswitch
⁶UK First-Time Buyer Statistics 2024 | Uswitch
⁷First time home buyers: How much can I borrow? - BBC News
⁸What is the average salary by age in London and the rest of the UK in 2024? - Times Money Mentor (thetimes.com)
⁹UK rental prices rise four times higher than inflation (yahoo.com)
¹⁰Deloitte Global 2024 Gen Z and Millennial Survey