16-24 year olds (Gen Z) are forced to dip into their savings four times more often than the 2022 average, new national research reveals.
The nationwide survey, conducted by Money.co.uk savings, investigated the UK’s saving habits amidst the cost of living crisis and the ongoing financial burden for the younger generations.
The study revealed that Gen Z dip into their savings around four times every month, compared to the 2022 average of just once a month according to last year’s report.
What’s more, the survey discovered that Gen Z withdraw from their savings more times per month than any other generation, with the main reason being to pay for bills (38%). A quarter of Gen Z (23%) withdraw from their savings due to social events, more than any other generation.
In addition, over seven in 10 (73%) people aged between 16 and 24 state the cost of living crisis has had a negative impact on their savings journey, with those aged 25 – 34 (74%) affected the most.
Despite this, the reports suggest young adults are making a conscious effort to try and build their savings, with over half (53%) revealing long-term financial support is the number one reason they put money away each month.
Lucinda O’Brien, expert at money.co.uk savings accounts, said: “The cost of living crisis has undoubtedly had a serious impact on Brits’ ability to save. The younger generations, who are now entering the workforce, are facing increasing utility bills coupled with on average lower wages than the older generations.
“As such, managing their savings as best as they can is now more important than ever. Having a savings plan is one way to ensure you’re making your money go as far as possible.
“A great way to manage your savings is to follow the 50/30/20 rule. If possible, this means 50% of your income should go towards necessities, 30% towards desirable purchases and 20% goes into a savings account.
“Our research shows that almost 40% of Brits currently have a regular savings account, which can be a great way to save a specific amount each month and earn interest over time.
“Over a third of Brits have an instant access savings account, financial providers such as Clearbank and Ford are currently offering savings rates of 4.51% (Clearbank – Chip Instant Access account) and 4.50% (Ford Money Flexible Saver account) – almost double the current average – and both can be opened with just £1.
“With Gen Z dipping into their savings on average four times a month, this could be a great option for those who need to be flexible with their savings.”