According to a new study, young adults are now prioritizing medium-term investments, such as starting a business, over long-term goals, like saving for a house deposit. The study, commissioned by NatWest and involving 2,000 individuals aged 18 to 35, reveals a notable shift in the financial aspirations of young people compared to their parents. The research found that this age group is more inclined to save for traveling, attending festivals, and wellness retreats, favoring spontaneous life experiences over long-term financial goals.
While conventional savings goals, such as buying a home, remain relevant, priorities have shifted significantly. Team GB Olympic gold medallists Alistair and Jonny Brownlee have collaborated with NatWest to create a video series offering helpful tips to overcome key barriers to savings. This initiative is part of NatWest’s effort to launch a new youth-focused savings challenge called Couch to Cash: the £5K Challenge.
The challenge aims to help young people build healthy monthly savings habits. The survey highlighted that 29% of young adults who save towards long-term goals allocate 20% or less of their savings towards such goals, with 50% focusing more on medium-term objectives.
Shift in youth savings priorities
The top 10 mid-term savings goals for young people include traveling (39%), starting a business (24%), and home decor (23%). The research also underscores the generational shift in savings priorities. Nearly half (47%) of young people believe their savings goals differ significantly from their parents’.
While parents might have allocated a larger portion of their income to long-term goals, young people today are more inclined towards medium-term savings. Despite the shift, most respondents (74%) express a desire to save more towards long-term goals. Mo Watt, a savings expert from NatWest, emphasized the importance of regular savings and introduced the NatWest Savings Goal Tool, which can help users create a plan to achieve their short-, medium-, or long-term financial goals.
The Couch to Cash: the £5K Challenge aims to provide valuable tips and a structured approach for young people looking to set realistic savings goals, whether that’s £5k or another amount. NatWest customers can use the Savings Goal Tool within the app to schedule regular payments and track their progress.
Photo by Etienne Girardet; Unsplash