Nearly half of Gen Z in the UK, individuals aged 14-29, have failed to save any money over the past year, according to research by Young Enterprise and HSBC UK. This alarming trend is a direct consequence of escalating living costs, which have risen by 13% since January 2022, outpacing wages and leaving many young people struggling to make ends meet. The average Gen Z individual has seen their purchasing power decrease by £1,400 annually.
The inability to save is attributed to various factors, including rising costs of living, societal pressures, and a perceived lack of adequate financial education. Young Enterprise's Chief Executive Sarah Porretta refutes the stereotype that young people are financially reckless, stating: "The idea that young people are careless with money simply isn't true. This report shows a generation under real pressure, having grown up through the Covid pandemic and subsequent cost-of-living challenges." The findings underscore the urgent need for improved financial education and support.
Emotional spending is another pressing concern, with two-thirds of Gen Z expressing anxiety about their expenditure. Over 40% admit to spending money to alleviate emotional stress, often leading to regret and guilt. This phenomenon was particularly pronounced among teenagers, with 64% worrying about spending and half experiencing remorse afterwards.
Despite these challenges, many young individuals are hesitant to seek financial guidance, citing embarrassment as a primary reason for not asking for help. Industry figures increasingly acknowledge the shortcomings in financial education provided within schools, with nearly two-thirds of UK adults believing their education did not adequately prepare them for managing money later in life.
Natalie Gregoire-Skeete, Head of Societal Purpose and Sustainability at HSBC UK, stresses the collective responsibility to address these issues: "When young people feel unable to save and anxious about spending, it's a clear sign we need to do more collectively – across schools, families, charities, and businesses – to build their skills and confidence for the future."