Millennials and Generation Z increase savings 30% as Covid-19 provides wake up call for young generations to save more

POSTED: 22nd March 2021
IN: Newsroom
  • 18 to 24 year olds increased savings by 30% in 2020 compared to 2019, and 25 to 34 year old increased savings by 32%
  • In contrast, older savers decreased the amount they were saving year-on-year
  • Overall Brits saved £2,112 on average, a 3% increase on 2019

New research from Aldermore bank1, asking over 4,000 UK adults about their savings habits, reveals that the Covid-19 pandemic has had an enormous impact on savings habits of the younger generations. Millennials (aged 25 to 34 years old) were the biggest savers in 2020, putting away on average £2,459, a 32% increase on 2019.

Generational divide in Covid-19 effect on savings

While the younger generations increased their savings during the pandemic, the older generations focused less on savings overall. There was a 15% drop in average savings among 45 to 54 year olds, a 9% decrease among 45 to 54 year olds, and 65 to 74 year olds saved 6% less in 2020, compared to 2019.

London and Wales the best savers in 2020

The savings ratio, the percentage amount of total saved compared to average pre-tax income, showed that Londoners and those in Wales saved the most with a 10.30% and 10.11% savings ratio respectively.

The West Midlands region had the lowest savings ratio at 5.97% followed by the North East with 6.49%.

Many still not savings at all

Over a quarter (27%) of Brits haven’t saved anything in the past 12 months and one in five (20%) saved less than last year. This was particularly the case with the older working age group as a third (33%) of people aged 45 to 64 years old did not save anything, compared to only 18% of 25 to 34 year olds. 

Two in five (41%) non-savers said they didn’t save in 2020 mainly due to having nothing left once accounting for necessary outgoings like bills, groceries etc were considered. Other main reasons for not saving showed many were prioritising their focus on other personal finance issues, such as paying down debt (15%), spending on home improvements (9%), focusing on mortgage and rent payments (8%). 

Ewan Edwards, director of savings at Aldermore, said: “The routine of saving can bring a lifetime of benefits, so it is brilliant to see young people increase their focus on saving. Lockdown has been a time many have been reviewing their personal finances and learning more about how to make the most of their hard-earned money.

“To those that have not saved last year, it is never too late to start. Money put away regularly, whether big or small amounts, really adds up over time and people will see they are achieving their short and long term savings goals sooner than they may expect.”

Notes to editors

1Research conducted by Opinium in December, with a nationally representative sample size of 4,011 UK adults.

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