Almost a third of 18-24 year olds have more than £25,000 in cash savings, a new survey claims.
Overall, 36 per cent of adults have built up savings of at least £25,000, and 17 per cent have £50,000 or more, Starling Bank says.
Meanwhile, 1 per cent of respondents have saved £100,000 or more.
However, 23 per cent have less than £500 in total savings.reflecting a growing savings gap across the board.
This is Money requested a breakdown of the occupations of under-25s earning over £25,000, but Starling Bank was unable to provide this information.
Spending money: Those under 25 are more likely to dip into their emergency fund to buy non-essentials
In general, those under 25 years of age have less savings, mainly due to their age and purchasing power, and this has been reflected in their difficulties in accessing housing.
Starling Bank said the figures reflect that Generation Z is a “haves and have-nots generation when it comes to savings.”
It suggested that 40 per cent of all Gen Z adults are saving for a home deposit, and many probably live at home with their parents, which could go some way to explaining why many have large savings.
Rachel Kerrone, of Starling Bank, said: ‘Circumstances have forced Generation Z to become more financially aware.
‘They entered adulthood during the cost of living crisis and post-Covid recession, as well as growing up during the financial crisis.
‘This may have boosted the message of how important saving is and galvanized a generation that aspires to remain financially stable.
“This could also have changed perspectives on lump sums (money inherited from wills, for example) that are now more likely to be saved for future goals than spent frivolously.”
Emergency funds decrease in favor of vacations
The survey revealed that even though a significant proportion of the country has sufficient savings, many are neglecting their emergency fund.
Almost a quarter of adults have less than £500 in an emergency fund and 50 per cent have less than £250. This increases to 80 percent for Generation Z.
This is considered separate from savings: money that can be accessed immediately, rather than money locked away.
One-third have no emergency fund at all, rising to 48 percent of those ages 18 to 24 and 38 percent of those ages 25 to 34.
Nearly a quarter of all adults who have created an emergency fund have dipped into it for unexpected bills or home repairs in the past year.
One in five have had to use it for engine repairs, while 16 percent have had to use it for medical or dental bills.
Among those under 25, 80 percent admit to having dipped into their savings for non-emergency expenses, much higher than other age groups.
Nearly two-thirds of all adults have used their emergency fund for non-essential expenses, including vacations (22 percent), clothing or shoes (17 percent) and takeout (11 percent).
Starling Bank says 8 percent of under-25s used it to buy tickets to Taylor Swift’s Eras Tour and 6 percent to buy Oasis tickets.
Clinical psychologist Dr Jenna Vyas-Lee said: ‘While emergency funds provide security, they can inadvertently reinforce anxiety about the unknown, which can be demotivating for some people.
‘In contrast, saving for joyful experiences focuses on building memories and fostering well-being, which has a deeper resonance with human psychological needs. “This approach is less about avoiding losses and more about creating significant profits.”
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