Young Brits are no longer saving like their parents did

Nearly half believe their parents would have saved a higher percentage of their income towards long-term goals than they are

A recent survey has revealed that young adults are prioritising short-term savings goals such as travel, wellness and cryptocurrency over long-term financial planning. The poll, which surveyed 2,000 individuals aged between 18 and 35, found that half of the respondents have financial ambitions spanning only six to 18 months.

Travel was the top priority for those in this particular age group, with 39% saving for trips abroad. Meanwhile, 24% were hoping to accumulate enough funds to start their own business. Other popular savings goals included health and wellness retreats and festivals, however some were planning to save for a car.

Highlighting the different views from previous generations, nearly half of those believe their mums and dads would have saved a greater percentage of their income towards long-term goals.

The research was commissioned by NatWest as part of their Couch to Cash: the £5K Challenge initiative, aimed at encouraging young people to develop healthy monthly savings habits.

The bank has teamed up with Team GB Olympic gold medallists Alistair and Jonny Brownlee to provide useful tips to overcome the main obstacles to saving.

Only 40% were saving for long-term goals like housing deposits, however, 74% of those with long-term savings goals expressed a desire to save more towards them.

Almost all of those who have savings make use of different pots, with 45% having three or more. However, three quarters of those with savings goals believe they could benefit from new savings strategies to help them achieve their targets.

As it stands, only 32% have utilised their Individual Savings Account (ISA) allowance for the 2024/25 tax year, although 35% who haven’t plan to do so before the early April deadline.

Mo Watt, a savings expert from NatWest, stated: “We know that regular savings – no matter how big or small – can add up to make a big difference down the line.

“The challenge aims to provide useful tips for those who are looking to get started or want some additional structure to their savings journey.”

ALISTAIR AND JONNY BROWNLEE’S TIPS TO TACKLE THE KEY BARRIERS TO SAVING:

1. Focus on your future self Keep your long-term goal in mind to stay motivated
2. Visualise your goal Picture what you’re saving for to help stay on track
3. Take small steps Set achievable short-term goals and celebrate progress
4. Try loud budgeting Share your savings goal with others to stay accountable
5. Build small habits Consistent saving habits can lead to big results
6. Celebrate your wins – Acknowledge milestones to keep yourself motivated
7. Automate your savings Set up a regular payment to grow your savings effortlessly
8. Use Round Ups Automatically round up purchases and save the spare change
9. Boost your savings Look for cashback, rewards, or perks to top up your savings
10. Set a timeline Give yourself a deadline to stay focussed on your savings goal