How a lot do Gen Z and millennials save every month – and the way does it examine to Gen X?

Younger generations are struggling to fund life milestones, data shows, with the average Generation Z and millennial saver putting away more than £100 less per month than their older counterparts.

Generation Z and millennials are managing to save just £171 per month on average, compared to £277 saved by Generation X each month, research by Hargreaves Lansdown and Oxford Economics reveals.

Only 59 per cent of younger people have enough emergency savings to cover the recommended three months of their salary, compared to 70 per cent of Generation X.

Gen Z are aged between 18 and 29, millennials between 30 and 45 and Gen X between 46 and 60.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: ‘Gen Z and millennials are falling horribly behind previous generations when it comes to hitting life’s milestones, and building up huge problems for their financial resilience, both over the long and the short term.

‘Starting out in adult life they tend to have lower incomes, and while it will build as they get to their 40s, so will their responsibilities in life. 

‘Money is stretched in too many different directions, so there’s a struggle to stay on top of their finances.’

Falling short: Young people are currently failing to save enough money, with an average of just £171 per month according to new data 

Data from Natwest paints an even bleaker picture, indicating that as many as one in four of those aged between 18 and 35 have less than £500 in savings. 

This is despite them setting an average savings target of £3,775 for 2025.

The typical savings pot for those between 18 and 35 is £9,579. A quarter have no savings set aside for emergencies.

Natwest said some 60 per cent of these young people rely on gifts from their family and work bonuses to top up their savings pots.

Savings aren’t the only problem

Beyond saving for short-term goals, younger people are also falling behind in other areas of their finances.

Only 31 per cent have sufficient life insurance cover, compared with 49 per cent of Gen X – though this may be down to the fact that many don’t consider life insurance until they have a family.

Just a third of Gen Z and millennials are on track with their pension saving, compared with 40 per cent of Gen X.

The average property equity among these groups is just £6,053, compared with £149,852 for Gen X – but again, this will be because many younger people don’t own a property, or haven’t owned one for very long. 

Those renting may find their finances are even further stretched.

The average Gen Z renter has just £77 left at the end of the month, according to the research.

Even when they can afford to buy a property, they often face higher debt repayments, with the average standing at £289 per month, compared with £224 among their older counterparts.

Coles said: ‘The cost of putting a roof over their heads is a huge issue. Higher house prices are trapping more of them in rental properties, and runaway rents have taken a terrible toll. 

‘Gen Z and millennial renters do worse in almost every aspect of their finances.

‘Even after they’ve bought, they don’t always have much equity in their property. As a result of this – and the fact they bought later, when house prices were higher – they often have larger mortgages, and face higher average monthly payments. 

‘There’s a risk this means they’re overstretched, and running up debts.’

House prices have risen by 2,534 per cent over the past 50 years, according to Mojo Mortgages, compared to wage growth of just 1,791 per cent over the same period.

If they had risen in line with salary growth, the average house would be £76,000 cheaper today.

If they are able to, some parents may choose to step in and help them.  

Coles said: ‘Any help young people can get onto the housing ladder will make a big difference. 

‘This can include gifts from parents, which could mean lump sums when they’re older.

‘However, one of the most effective approaches is to put money aside regularly for them through their childhood, when it has time to grow into a decent nest egg. 

‘The Jisa is a sensible option for this cash, because it’s tied up until they’re 18 and can be invested to give it the best opportunity to grow over the long term.’

Coles added: ‘Don’t overlook the opportunity to fund a pension for them when they’re under 18 too. It might not seem very pressing, given everything else they have to save for, but it can make an enormous difference because it has so long to grow. 

‘If you were to contribute the full £3,600 per year to a junior Sipp they could have a pension worth almost £98,000 by the age of 18.’