Young people prioritise starting a business over saving for a house

Young people are prioritising medium-term investments, such as starting a business, over long-term goals such as saving for a house deposit.

A new study of 2,000 people aged 18 to 35 has revealed a notable shift in the savings aspirations of young people when compared with those of their parents.

It found this group are more likely to prioritise saving towards travelling, attending festivals and wellness, leaning towards spontaneous life experiences over longer-term financial goals.

The study, commissioned by NatWest to launch a new youth-focused savings challenge, found that while conventional savings goals are still part of young people’s financial picture, priorities have shifted.

Twenty-nine per cent of young adults who are saving towards long-term goals are allocating 20% or less of their savings towards this, with 50% focusing on medium-term goals.

NatWest is encouraging young people to build healthy monthly savings habits by launching Couch to Cash: the £5K Challenge.

To accompany the challenge, Team GB Olympic gold medallists Alistair and Jonny Brownlee created a video series featuring helpful tips to tackle the key barriers to savings, with the latest episode available now.

The top 10 mid-term savings goals for young people, are:

• Travelling (39%)
• Starting a business (24%)
• Home decor (23%)
• Investing in the stock market (22%)
• Health & wellness retreats (20%)
• Luxury travel experiences (20%)
• Investing in cryptocurrencies (18%)
• A wedding (15%)
• Buying an electric car (13%)
• Attending festivals (12%)

The research highlights the shift in savings priorities compared to previous generations, with almost half (47%) of young people believing that their savings goals differ from their parents’ goals at the same age.

Forty-seven per cent believe that their parents would have allocated a greater percentage of income to long-term goals than they are currently, and 37% believe all their parents’ savings would have gone towards saving for long-term goals, such as a home or wedding.

While almost three-quarters (72%) believe that they would benefit from new saving strategies to reach their goals, only a third (32%) of 18-35 year olds have put money into an Individual Savings Account (ISA) ahead of the tax year deadline, and of those who haven’t, only 35% intend to do so before the tax year ends.

Despite this trend, the majority of respondents (74%) would like to save more towards their long-term goals.

Mo Watt, Savings Expert, from NatWest, said: “47% of young people today believe their savings goals differ from those of their parents at the same age and our research sheds more light on this generational shift in attitudes.

“We know that regular savings – no matter how big or small – can add up to make a big difference down the line. Couch to Cash: the £5k Challenge aims to provide useful tips for those who are looking to get started or want some additional structure to their savings journey. Our NatWest Savings Goal Tool can create a plan to help you achieve your goals, whether that’s in the short, medium or long term.”

Couch to Cash: the £5k Challenge’ aims to help young people set realistic savings goals to reach their target – whether that’s £5k or another amount - based on how much you can afford and how quickly you want to reach your goal. NatWest customers can use the Savings Goal Tool within the app to schedule regular payments and track their progress.

For more information on savings and Couch to Cash: The £5k challenge, visit natwest.com/couchtocash