More than two thirds (67%) of young people in the UK are not feeling motivated to save, according to new research from smart money app Plum.
The research, which analysed the saving and investing habits of young people, found that the majority of those aged 18-24 lacked motivation to save, with just 1 in 5 able to put money aside for a rainy day.
It also found that debt was particularly prevalent among this age group, with just 1 in 5 (20%) stating that they had little to no debt at all outside mortgages and student loans.
An encouraging finding, however, was that young people feel enthusiastic about investing as a way to grow their wealth. More than 1 in 5 (22%) are investing currently, a higher number than for any other age group.
Investing has seen a boom among young people over the past few years as improved technology and widespread information through social media has made it much more accessible.
This proactive attitude is backed up in how engaged young people are with their finances. Close to half (47%) of those aged 18-24 check their bank account at least once a day. In contrast, older generations are far less likely to be checking their bank account every day, dropping to 40% for the 25-34 cohort and 29% for the 35-44 cohort.
Spending priorities revealed that younger people are also more inclined to generosity than their older counterparts. Around one in six (17%) stated they were saving specifically for gifts for other people, showing how they prioritised giving back to others.
Rajan Lakhani, money expert at Plum said, “It is concerning that so many people see no choice but to get into debt, especially right now when the base rate, which influences interest rates for paying back loans, is at 5.25%.
“Perhaps with the cost of living increasing, particularly for day to day items and housing, people feel they have to take out debt. People aged under 24 are particularly vulnerable to the effects of inflation as they are more likely to have a low income, due to studying or being at the start of their career.
“As prices go up due to inflation, they have substantially less if anything to put aside each month.
“Yet there is a lot to be optimistic about here as well. Young people have time on their side and they are using it to make their first steps in investing, which means they are more likely to be maximising the money they do put aside.
“Due to the power of compounding, even small investments now have the potential to grow much bigger over a long time frame. So it’s heartening to see that they are so keen to get on board with the opportunity that investing offers via easy-access apps and platforms.”
