Social media may be inspiring a new generation of savvy savers and fiscally responsible young adults, with 74% of Gen Z participating in social media-driven challenges to boost their overall savings, as revealed in the latest NatWest Savings Index.
In comparison to other age groups, Natwest Group noted that Gen Z is “the most likely of any generation to budget.”
Almost seven in ten (69%) 18-24-year-olds say they “create a budget for their finances, contrasting with those aged 65 and older where less than half (42%) report setting a budget for themselves,” the report from NatWest revealed.
The Natwest research report added that younger savers are “actively engaging with social media-driven savings challenges.”
Nearly a fifth of 18-24-year-olds say they “take part in ‘no-spend months’ (18%), and the ‘50/30/20’ (wants/needs/savings) rule (17%), with more than one in five trying no impulse purchases (21%), as they seek to boost their overall savings. All of this may be creating a generation of financially aware young people.”
The NatWest Index has reportedly “surveyed 10,000 people across the UK.”
It found that nationally, 22% of UK adults “save less than £50 a month.”
On average, UK adults who save are “saving 24% less per month than they think they should, putting away £203.21 each month despite believing that they should be saving closer to £265.95.”
As well as many lacking a savings goal, the research revealed: “that the absence of a savings buffer is taking a toll on their mental health, with 22% of respondents saying their savings balance is negatively impacting their wellbeing and more than a quarter (27%) of adults saying they do not discuss their finances with anyone.”
There are clear generational differences, “with younger generations more likely to discuss their finances (86%), compared to Baby Boomers, 37% of whom say that they would not discuss this with anyone.”
The research also discovered that “nearly two in five UK adults (39%) do not budget at all, and 13% have no emergency fund, with 25% of those surveyed having less than £400 in their emergency fund, despite ongoing economic challenges.”
Over half of respondents cited “increased grocery costs (56%) and increased energy bills (51%) as the top factors limiting savings potential.”
NatWest further noted that “more than three-quarters (76%) said they were willing to cut discretionary spending to boost savings, including 42% willing to give up eating out to increase how much they can save.”
Lewis Broadie, Savings Expert at NatWest said:
“On the plus side, it’s encouraging to see the younger generation engaging with new ideas and solutions to boost their savings. The research is a stark wake-up call – nearly two in five adults (39%) don’t budget at all and just over half (53%) do not have a specific savings goal. The findings stress a need for greater financial education and accessible tools to support people in effectively managing their budgets and getting practical support to reach their savings goals.”