We hear it all the time that millennials are too busy spending to bother saving. Those of us who live in expensive cities like London, spend so much on rent that there’s no hope of ever being able to afford a house of our own. So why bother saving at all? Much better to spend what’s left of your hard earned cash after paying your rent and coughing up for public transport, and have some fun with it on a Friday night out, or a decent avocado on toast for brunch.
Well, that’s what people would have you believe. But increasingly, it seems as if those in their twenties are the ones most likely to save – particularly compared to those in their thirties. In the summer, I wrote about research that showed that millennials – or those aged 24-35 – were choosing to put large sums of money into their pension plans. And today, another study backs up the thesis that millennials are more cautious with their cash than you might think.
Research from Close Brothers and the Pensions and Lifetime Savings Association shows that on average, a millennial worker saves £3,445 per year – in comparison to the average £3,073 saved up by the ‘Generation X’ers aged 35-54. That’s non-pension savings – so nothing to do with any work pension or an auto-enrolment scheme. Could it be that millennials aren’t actually as frivolous with their money as people think? It’s true that the millennials questioned didn’t seem to be saving for their long term futures; the majority of them chose to save up for holidays or to pay off debt, although a third of them did claim to be saving to buy a home. On the other hand, among those aged 35 and upwards, saving for retirement was their number one priority.
So what’s the reality here? Is it simply that those in their late twenties and early thirties have more capacity to save, as they’re less likely to be lumbered with the financial outgoings that come with children or a mortgage? Or is it that, contrary to everything we’ve been told, millennials are actually sensible savers, thinking about their future? As we all know, data can be easily manipulated. But it’s looking increasingly like the younger generations are more frugal than they are given credit for.