Young Brits are facing challenges when it comes to saving money, with a mindset of ‘spend now, save later’ affecting their financial future. A recent study by NatWest revealed that 18–35-year-olds have an average of £9,579 in savings, but a quarter of them have £500 or less saved, with 25% having no savings set aside for emergencies. The main reasons cited for this lack of savings include a shortage of disposable income and prioritising saving for other things instead.
The research, conducted among 2,000 young people, highlighted that 60% of under-35s rely on work bonuses or gifts from family to boost their savings annually. To address these challenges, NatWest has launched the Couch to Cash: the £5K Challenge, aimed at encouraging young people to develop healthy savings habits. Team GB Olympic gold medallists Alistair and Jonny Brownlee have endorsed the challenge, providing valuable tips to overcome barriers to saving.
The study identified the primary obstacles for young Brits regarding saving, including the pressure of the cost of living, lack of disposable income, debt repayment, economic uncertainty, YOLO lifestyle, fear of missing out (FOMO), irregular income, changing life milestones, and a lack of financial knowledge. Despite monthly savings averages of £195 for 18-24-year-olds and £273 for 25-34-year-olds, 7% of under 35’s struggle to save regularly.
Looking ahead, three-quarters of young Brits aim to save more in 2025, with an average target of £3,775 over the next year and £19,920 over the next five years. To support these goals, 70% believe a tool to track their progress and set savings targets would be beneficial. Surprisingly, 45% of young Brits are not actively saving for retirement, with 17% postponing retirement savings for at least a decade.
Alistair and Jonny Brownlee emphasised the importance of setting achievable goals and taking small steps towards long-term financial objectives. NatWest’s Mo Watt encouraged young adults to break down savings ambitions into manageable targets, suggesting the use of their Savings Goal Tool to facilitate the process. The Couch to Cash: the £5k Challenge allows participants to set monthly savings goals through the NatWest app.
In conclusion, the ‘spend now, save later’ mindset prevalent among young Brits is hindering their ability to build substantial savings. By addressing the barriers to saving, setting realistic goals, and implementing effective savings strategies, the younger generation can secure their financial future. Initiatives like the Couch to Cash challenge and tools like the Savings Goal Tool aim to empower young people to take control of their finances and work towards achieving their savings targets.