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Revealed: Cross Generation Money Priorities In 2021

  • Gen Z Brits would rather save up for dream home over dream holiday- Gen Z are the biggest savers, putting aside on average 17% of their monthly pay
  • “I believe I have enough time to save for retirement”
  • Gen Z and Millennials prioritise saving up for home over a pension

The COVID-19 pandemic has shaken up our attitudes towards how we deal with money, with furlough and job cuts causing nationwide financial anxiety over the past year, many have been forced to consider the value of their expenses – and savings.

New research1 from money.co.uk examines the cross-generational divide in how Brits view their current financial situation, as well as how they are managing their money following the pandemic. 

Salaries: spend or save?

The data reveals that Gen Zers (18-24) are placing the biggest focus on savings, with the generation admitting to saving on average nearly a fifth of their monthly pay (17%). This is followed by Millennials (25-40) who are saving on average 11%, and Gen X (41-56) saving on average 10%. 

It’s not just an age group split, there is also a clear regional divide when it comes to money management; with those in the North East saving on average 22% of their monthly pay, while Londoners are only managing to save 11%. 

So, once the bills have been paid, how are people spreading the rest of their salary? For Gen Z Brits, almost a third (32%) are giving priority to saving up for a home. However, for remaining Brits, it seems that the beach is calling as 41% of Gen X respondents say they are prioritising savings for their next big holiday, followed closely by 38% of Millennials.

Cross generation salary priorities

Gen ZMillennialsGen X
1. Saving for a home (32%)1. Saving for a holiday (38%)1. Saving for a holiday (41%)
2. Money to spend on material goods (31%)2. Money to spend on material goods (34%)2. Money to spend on material goods (35%)
3. Saving for a holiday (28%)3. Saving for a home (30%)3. Saving for a pension (27%)

Pension plans

But what about pensions? Gen X is the only generation to place them as one of their top three priorities (27%). For Gen Z, pensions came in at the lowest priority, with only 8% confirming they prioritise it within their salary, and retirement savings coming in 6th spot (15%) for Millennials. 

44% of Gen Z individuals say they are prioritising buying a house over saving into their pension, with nearly three quarters of the respondents within this age group saying they have plenty of time to save for retirement. Likewise, 36% of Millennials are prioritising getting on the property ladder, with over half of respondents within this age group also agreeing they also have time to save for retirement. 

It seems however that Gen X is realising the importance of saving for retirement, with nearly 20% saying that they are prioritising saving into their pension as opposed to buying a house. That said, as the oldest group represented, it should be pointed out that hopefully more of them are already homeowners than the other two generations.

These generational differences in attitude could be a result of pension misunderstandings, and not having a clear understanding of how much exactly should be paid into a pension. 

Cross generation, there is a disparity when it comes to how much people contribute to their pensions, with Millennials least likely to make additional contributions on top of their auto-enrolled amount. Despite this, Brits are in agreement that on average around £22,500 a year will be needed for a comfortable retirement:

Cross generation pension breakdown



Gen ZMillennialsGen X
Make additional contributions on top of auto-enrolment23%17%25%
Opt out of all contributions17%15%10%
Don’t know how much they currently pay23%23%26%
Average they believe will be needed per year to live on in retirement£22,612.11£22,944.41£21,779.23
% who believe this figure is unachievable25%21%26%

Pressing financial concerns

There is no denying that different generations will have differing financial concerns, and that the pandemic may have heightened these worries. The biggest concern within Gen Z is that their pay isn’t enough to maintain their current lifestyle (31%), which is echoed by 30% of Millennials. 

For Gen X, retirement seems to be the biggest burden on their mind, with almost half (44%) admitting to being worried they won’t have enough money to live comfortably once finishing work. 

However, it seems that Gen Z individuals have the most optimistic attitude towards saving money, with nearly 60% agreeing that saving for big life events is manageable in the current climate. 

James Andrews, personal finance editor at money.co.uk, said: “Everyone’s financial situation is different, but the earlier you start paying into a pension, the better result you’ll get at retirement.

“That’s because if you don’t start saving until you’re older, you’ll need to put far more away to catch up – as the money has less time to grow.

“Once you pass the automatic enrolment earnings threshold (currently £10,000 a year or £192 a week) 5% of your pre-tax salary goes straight into your pension to be topped up by your employer, unless you actively opt out or your firm has a more generous scheme in place.

“But while that might make some younger workers feel secure, remember that every extra pound you save a month in your 20s and 30s can be worth hundreds by the time you retire – but the later you leave it the less time that money has to grow.

“When it comes to staying on top of your work or private pension, your provider will send you a statement each year that details the funds you have built up – along with a projection of what this will be worth at your nominated retirement age.  

“If you want more of an idea of how much you should be putting into your pension, or how much larger contributions now would add to your final pot, use a pension contribution calculator. This will show you what your pension is likely to be worth at retirement, based on what you’re saving now and how much is already there.”

To find the best pension for you, visit: https://www.money.co.uk/pensions.htm 

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