Young adults aged 18 to 35 are often described as the Yolo (you only live once) generation, but it seems they may not be as spendthrift as many might think, as new research suggests they would rather save for the future.
Over half (51%) of under-35s say they get more satisfaction from saving money rather than spending it, but daily financial costs and low wages mean they are unable to save, according to the Pensions and Lifetime Savings Association.
One in three (30%) young adults say the cost of their rent or mortgage stops them from saving money and 43% say their salary it too low, whilst 48% say the current cost of living is too high.
However, the majority (77%) of respondents said that they have felt the same or increased pressure to save for the future in the last six months, with only 6% feeling this pressure had decreased.
Many 18-35 year olds believe when they do save money they feel they cannot take financial risks and opt for low-interest options, despite appearing to have an appetite for better return and valuing a good interest rate when choosing a saving product.
Some are managing to save but typically for the short term, as 34% say they are saving for a rainy day and 32% are saving for a one-off purchase such as a holiday, car or TV.
Joanne Segars, chief executive of the association said: “The 18-35 year olds are no different to many people, they want to save for a secure future but short term financial pressures get in the way.
“It’s not surprising that without help this group prioritises short-term over long-term saving given the current rock-bottom interest rates and low wage increases”.
When it comes to debt, the majority (57%) say they do not have any, excluding student loans, and 65% of 18-35 year olds do not acquire any debt on a monthly basis.
Only a quarter of under-35s say student loans prevent them from saving, suggesting student loans have become the normal way of life for the younger generation.
Ms Segars said: “We’ve seen this behaviour in workplace pensions with a very low opt out rate from automatic enrolment of just 7% by those aged under 35.
“Those younger savers staying in their workplace pensions are smart. Automatic enrolment provides them with a hassle-free way to save for the long-term, they don’t have to think about the investment strategy, or choosing the product, or moving their money, they just have to keep saving”.