The days of Bank of Mum & Dad are coming to an end as Gen Z takes control of their financial future
- Over a third have more than £1,000 squirrelled away
- Over two thirds of Gen Z believe saving little and often is key
- 40% of Gen Z believe saving is fundamental for the future
Zopa has revealed that the next generation, Gen Z, has its finger firmly on the financial pulse with over a third (35%) having more than £1,000 in savings already.
With the FCA reporting that one in 10 UK adults have no savings at all, Zopa’s findings contradict the common misconception that Gen Z and younger generations in general aren’t prioritising saving for the future. Underestimating the younger generations’ appetite for saving is debunked by this recent research, as over two thirds of Gen Z believe that saving little and often is key.
Another recent FCA report found that compared to baby boomers, mortgage, student debt and family spending will limit the ability to save throughout working life for the next generations. However, Gen Z is already proving that they are making saving a priority from early on by putting away a significant amount of money in their younger years. This is also strengthened by the mentality of 40% of respondents believing that saving is fundamental for the future.
The new research, that examines the current views towards finances and savings from Gen Z and Millennials, also revealed that over half of Millennials (52%) are making saving a top priority with over £1,000 already locked away.
“Our latest research shows that the younger working generations are setting a new agenda for their financial futures,” said Andrew Lawson, Chief Product Officer at Zopa. “With Gen Z showing they are the savviest when it comes to financial control, it may be time to wave farewell to the idea of the Bank of Mum & Dad.”
Gen Z’s checking finances nearly everyday
Zopa’s research also explored Gen Z and Millennial’s general thoughts towards finances and how they stay in control of their money.
The ways in which the generations keep up to date with their bank accounts differed with 70% of Gen Z checking in on their finances nearly every day, compared to 61% of Millennials doing the same. Gen Z will be found checking their bank accounts on their phones (63%), while the majority of Millennials will head to more traditional online banking hubs (60%), and twice as many Millennials would rather go to a branch to check in on their balance than Gen Z. With the younger Gen Z growing up immersed in tech, it is unsurprising that they have embraced mobile banking more than other generations.
Zopa asked respondents specifically about their openness to discuss money with family and friends, and a staggering 73% of Millennials and 70% of Gen Z were happy to talk about their finances in general.
“It’s unsurprising that there are some similarities and differences between Gen Z and Millennials when it comes to their savings and finances, but it’s clear that Gen Z has taken the crown of most financially savvy generation,” Andrew Lawson continued. “Getting a grip on your finances at any age is crucial to feeling positive and in control of your financial situation, which can go a long way to feeling good about money. As more and more tools come to market to help people stay in control of their money, the generations that are more open to trying new apps and features are getting better and more adept at managing their finances. These tools aren’t just for the younger generation though, you can become financially savvy at any age!”
Zopa offers a range of investment products which deliver a healthy balance for customers who want to see a good return without investing in a highly volatile product. Zopa has been an award-winning peer-to-peer lender since 2005. Since gaining its bank licence with restrictions in December 2018, Zopa will now offer a wider suite of simple, fair financial products – including a deposit account, credit card and money management app – with the aim of making people feel good about their money.
For this research, we asked 1,500 individuals that were either working, earning minimum wage or above, or university students. Age split listed below:
- * Gen Z = 18 – 22 year olds
- ** Millennials = 23 – 38 year olds
3 Gen Z = 18 – 22 year olds
4 Millennials = 23 – 38 year olds