The spending habits of young consumers might be of interest to brand owners and financial institutions, according to a recent financial research survey which has revealed that 18-24-year-olds would rather spend their money than save it.
SunLife reported that as much as 40 per cent of young adults have no savings at all and those who do save have a tendency to put money in a jar as a method of squirrelling cash away.
Indeed, 43 per cent of those aged between 18 and 24 say they put money for a rainy day in a jar or tin, which is significantly more than the over-55s, of which just 24 per cent save in this way.
While this is definitely better than not saving at all, Ian Cooper, head of savings at SunLife, admits that jars were “never intended as secure homes for hard-earned cash”. “Not only is it very tempting to raid rather than leave for a rainy day, but it isn’t earning a penny in interest” he added.
Despite so many youngsters not saving at all, the survey found 18-44 year-olds have on average £10,436 in savings. However, this pales in comparison to what the over-55s have at £49,833.
In fact, almost a fifth of those nearing their retirement have £100,000 or more put aside for their future, whether to supplement their pension or help their children.
However, the government announced the launch of the Lifetime Individual Savings Account (ISA) in this week’s Budget (March 16th), which may change the way young people save. From April 2017, those aged 18-40 who save £4,000 a year will receive a bonus of 25 per cent from the government.
For more information on Vision One's financial research survey services and our expertise, please contact Jas Gidda on 0203 693 3150.