Young Adults Prioritise Entrepreneurship Over Home Ownership Savings in Recent Study
A recent study of 2,000 individuals aged 18-35 has shed light on a significant shift in the savings priorities of young adults compared to those of their parents. Conducted by NatWest, the study revealed that young people are now more focused on medium-term investments, such as starting a business, rather than long-term goals like saving for a house deposit.
The findings highlight a trend where young adults are leaning towards prioritising saving for experiences such as travelling, attending festivals, and focusing on wellness rather than traditional financial goals. While traditional savings targets still play a role in their financial plans, the study shows that 50% of young adults are allocating their savings towards medium-term goals, with only 29% saving 20% or less for long-term objectives.
Encouraging the development of healthy monthly savings habits, NatWest has introduced the Couch to Cash: the £5K Challenge. In support of this initiative, Team GB Olympic gold medallists Alistair and Jonny Brownlee have created a video series offering valuable tips to address common obstacles faced in saving money.
The top 10 medium-term savings goals identified by young adults in the study include travelling, starting a business, home decor, stock market investments, health and wellness retreats, luxury travel experiences, cryptocurrencies investments, weddings, purchasing an electric car, and attending festivals. This shift in savings priorities signifies a departure from the traditional goals pursued by previous generations.
The research also revealed that nearly half (47%) of young adults believe their savings aspirations differ from those of their parents at the same age. While 72% acknowledge the need for new saving strategies to achieve their goals, only one-third (32%) have contributed to an Individual Savings Account (ISA) before the tax year deadline. Of those who have not, only 35% plan to do so before the deadline.
Despite the changing trends, the majority of respondents (74%) express a desire to save more towards their long-term objectives. Mo Watt, Savings Expert at NatWest, emphasised the importance of regular savings, regardless of the amount, in accumulating significant sums over time. The Couch to Cash: the £5k Challenge aims to offer guidance to individuals seeking to start or structure their savings journey.
Offering practical tools to set achievable savings goals, NatWest customers can utilise the Savings Goal Tool within the app to schedule regular payments and monitor their progress. The initiative aims to empower young people to reach their financial targets, whether it be £5,000 or a different amount, based on their financial capacity and timeline for achieving their goals.
The study’s insights serve as a reflection of the evolving attitudes towards savings and financial planning among the younger generation. As financial institutions like NatWest continue to introduce innovative initiatives like the Couch to Cash Challenge, young adults are provided with valuable resources to navigate their financial journeys effectively.