Financial Awareness Day: Gen Z out-saving older generations, new data shows

Ahead of Financial Awareness Day (August 14), new research from Shepherds Friendly reveals striking generational differences in how people save and invest. Surveying 2,000 UK adults, Shepherds Friendly found that nearly a quarter (23%) put nothing into their savings each month, a pattern that varies sharply by age group. 

With household finances already under strain from rising living costs, the results reveal which generations are most financially vulnerable to both unexpected expenses and potential changes to savings tax rules.

Data from Shepherds Friendly reveals generational gaps when it comes to the proportion of people not saving:

• Gen Z leads the way in savings, with over 88% of 18-24 year olds putting money aside each month – despite assumptions that younger people struggle to save the most.

• Saving rates seem to drop significantly in middle age. The proportion of non-savers rises dramatically to 38% among 45-54 year olds, likely due to financial pressures such as mortgages and raising children.

• Those aged 55-64 are the second least likely to save each month, with over a third saving nothing monthly. 

The data also highlights differences among those who do save with young people saving the most per month*:

*Total figures don’t include investments. 

• Investors save more than twice as much as non-investors across all age groups – yet 47% of people have never considered investing.

• Adults aged 25-34 are the UK’s most active investors, saving £529 per month, closely followed by 18-24 year olds contributing £513 to savings monthly.

• 45-54 year olds who don’t invest are saving the least, putting away just £71 per month.

• While savings dip between ages 55 and 64, they rise again post-retirement, with over-65s continuing to invest and save as much as £379 a month.

Below, Derence Lee, Chief Finance Officer, at Shepherds Friendly shares advice on the importance of saving and choosing the right accounts to meet different financial goals:

“Savings isn’t just good practice – it’s an essential for financial stability at any age. Unexpected expenses like car repairs or job loss can arise at any time, and without a financial buffer, you may risk falling into debt. That’s why having an emergency fund in an easy-access savings account is crucial – it allows you to withdraw funds instantly and without penalties when you need them most.

“For medium- to long-term goals, ISAs are particularly effective. For younger adults saving towards a first home, the Lifetime ISA is a smart choice – offering a 25% government bonus on contributions, which explains why those aged 25–34 are leading usage here, according to our survey. Meanwhile, those aged 35–44 are allocating more to Stocks and Shares ISAs, which offer the potential for greater long-term growth and help shield savings from inflation over time.

“Pensions also play a critical role – not just later in life but from the moment you enter the workforce. Interestingly those aged 18-24 are currently contributing the most to personal pensions each month with the added benefit of employer contributions and tax relief, pensions are one of the most powerful tools for building a financially secure retirement.

“Ultimately, having the right savings strategy – whether for emergencies, major life milestones, or retirement – helps build resilience and peace of mind, no matter your age or stage in life.”