Nearly a third of 18-24 year olds have more than £25,000 in cash savings, a new poll claims.
Overall, 36 per cent of adults have built up savings of at least £25,000, with 17 per cent sitting on £50,000 or more, Starling Bank says.
Meanwhile, 1 per cent of respondents have saved £100,000 or more.
However, 23 per cent have less than £500 in total savings reflecting a growing savings gap across the board.
This is Money asked for a breakdown of the occupations of under-25s with more than £25,000 but Starling Bank could not provide this information.
Splashing the cash: Under-25s are more likely to dip into their emergency fund for non-essentials
In general, under-25s have smaller nest eggs, mainly because of their age and earning power, and it has been reflected in their difficulties with getting onto the housing ladder.
Starling Bank said the figures reflect Gen Z is a ‘generation of haves and have nots when it comes to saving’.
It suggested 40 per cent of all Gen Z adults are saving for a home deposit, with many likely living at home with parents, which could go some way in explaining why many are sitting on hefty savings pots.
Rachel Kerrone, of Starling Bank, said: ‘Gen Z has been forced by their circumstances into better financial awareness.
‘They entered adulthood during the cost-of-living crisis and the post-covid recession, on top of growing up during the financial crash.
‘This may have driven the message of how important saving is, and jump-started a generation aiming to stay financially stable.
‘This could also have changed perspectives around lump sums (money inherited from wills, for example) which are now more likely to be put in savings towards future goals than frivolously spent.’
Emergency funds waning in favour of holidays
The survey revealed that despite a significant proportion of the country sitting on a comfortable nest egg, many are neglecting their emergency fund.
Nearly a quarter of adults have less than £500 in an emergency pot and 50 per cent less than £250. This rises to 80 per cent for Gen Z.
This is seen as separate to savings – money that can be accessed immediately, rather than money locked away.
A third do not have an emergency fund at all, which increases to 48 per cent of those aged 18-24 and 38 per cent of those aged 25-34.
Nearly a quarter of all adults who have built up a rainy day fund have dipped into it for unexpected household bills or repairs in the past year.
One in five have had to use it for motor repairs while 16 per cent for dental or medical bills.
For under-25s, 80 per cent admit to dipping into their savings for non-emergency spending, far higher than other age groups.
Nearly two thirds of all adults have used their emergency fund for non-essential spending, including holidays (22 per cent), clothes or shoes (17 per cent) and takeaways (11 per cent).
Starling Bank says 8 per cent of under-25s used it to buy tickets for Taylor Swift’s Eras Tour and 6 per cent on Oasis tickets.
Clinical psychologist Dr. Jenna Vyas-Lee said: ‘While rainy day funds provide security, they may inadvertently reinforce anxiety about the unknown, which can demotivate some individuals.
‘In contrast, saving for joyful experiences focuses on building memories and fostering well-being, which resonates more deeply with human psychological needs. This approach is less about avoiding loss and more about creating meaningful gains.’
SAVE MONEY, MAKE MONEY
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence. *Chase: Cashback available for first year. Exceptions apply. 18+, UK residents.