Saving for the future is something that people of all ages need to be getting into the habit of, but unfortunately, it seems that not everyone is taking it seriously, with the younger generation in particular having a "live for today" mentality.
Research from Investec Wealth & Investment shows that 37% of those aged under 35 prefer to enjoy themselves now rather than save or invest for the future, painting a worrying picture for the future finances of the millennial generation. This is in sharp contrast to those aged 55+, with just 21% saying they'd rather spend now than save.
This highlights a clear divide in savings behaviour, with older respondents being far more likely to put money aside. This could be because the reality of retirement is far closer and they're beginning to realise the pressure, but it could also be due to wider economic factors.
Indeed, 88% of under-35s blame the high cost of living for their inability to save, something that's exerting far more pressure than it did on previous generations. Many over-55s agree, with 66% saying that the cost of living means the younger generation have never had it so bad. They accept that it's financially tougher for millennials than it was for them, with 83% of older respondents thinking they invested more than the current crop of under-35s when they were the same age.
Similarly, 38% of under-35s blame unaffordable house prices and the difficulty in saving for a deposit, while 33% point to the debts they'd built up in university, something that older generations didn't have to face. Indeed, 27% think there's no point in saving while they're still in debt and 20% don't think they'll ever be debt-free, with this reliance on credit having a keen impact on future aspirations.
However, that's not to say that other factors aren't involved. Nearly half (48%) of respondents aged under 35 cite today's "buy now pay later" culture as a factor in their inability to save, so much of the debt they're in could be brought on themselves. This is despite the fact that 67% are worried about the long-term consequences of being unable to save, so it's clearly something that needs to be addressed.
"The culture of thrift has declined in recent years among young people because they have become more reliant on debt to finance their lifestyles," said Chris Aitken, head of Financial Planning at Investec Wealth & Investment. "University fees mean that debt is part-and-parcel of many young peoples' lives long before they contemplate taking on a mortgage, [and] given how much is required for a deposit, it's easy to understand why so many millennials don't see the point of saving for one.
"However, there's a danger that this mindset becomes fixed for life. Our advice is to start saving and investing what's affordable as early as possible."
Are you ready to take that advice? Start the process by comparing the top savings accounts to start planning for your financial future, and if you need a bit of a push, read our tips for paying down debt and building up a savings pot instead.
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