Baby Boomers save the most money – but Gen Z reckon they know how to make their money work hardest for them.
A poll of 2,000 adults* revealed 66 per cent of those under 27 years old believe they can grow their money best; however, it was Millennials who were most likely to utilise a stocks and shares ISA.
Boomers used savings accounts and cash ISAs most frequently but were the generation also most likely to keep money in their current account.
Millennials save most annually, £5,036 a year on average, but it’s Boomers who have most tucked away overall, with £27,966 held aside.
Jen Adams from Virgin Money, which commissioned the research as part of their ‘investing made extra’ campaign, said: “The study has been quite fascinating, as different generations approach money in varying ways.
“Gen Z adults, while saving the least, are typically more dynamic in trying something new and open to investing – whereas older generations prefer to keep their funds easily accessible, in cash ISAs or current accounts.
“That said, all generations gravitate towards a predictable rate of return on savings accounts and are potentially missing out on making their money work harder for them by investing.”
Interestingly, it’s Gen Z who were most inclined to save anything they can, while Millennials focus on it the least and are also most dissatisfied with their revenue growth.
And 38 per cent of the youngest generation had already dabbled with investing their savings, with 42 per cent still considering doing so – both the highest proportion of any age group.
Across all respondents, high living costs, fear of risk and low income stopped them from growing their savings more.
When it comes to plans for their cash, 30 per cent were focused on spending it all, with retirement in mind rather than passing on as inheritance.
While 42 per cent prefer to put their money into savings and don’t invest, only eight per cent put more into investments than savings.
Confidence has increased since a change of government – with 32 per cent believing it’s a better time to save with political stability, leadership and new policies the top reasons.
Four in 10 said they’d like to explore investing but are held back by their knowledge, with 47 per cent having money set aside that they want to grow in a new way should an opportunity arise.
Jen Adams, from Virgin Money, which is rewarding customers who save and invest with a great interest rate added: “The findings have shown there’s a lot more confidence around saving than investing, which is something the financial services regulator (FCA) have set a target on.
“They’re aiming to reduce the amount of people who have over £10,000 in cash savings by 20 per cent by the end of 2025.
“However, what people don’t tend to consider is that saving and investing work hand in hand, enabling short and longer-term goals to be realised.
“There’s risk attached to anything in life but investing while saving can provide another way of growing your money.
“That’s why we’ve launched our new offer giving investors the opportunity to save into a fixed rate savings account with a market-leading rate.”
*About the research
Survey conducted via OnePoll for Virgin Money, with a sample of 2,000 UK adults in July 2024