A comprehensive survey of 1,000 individuals aged 18 to 29 has uncovered that Generation Z is pioneering innovative financial strategies to bolster their savings without forgoing life's pleasures. The research, commissioned by Plum, indicates that 95% of young people are employing clever cost-cutting methods while maintaining their enjoyment of small luxuries.
Reselling and Banking Tools Drive Savings
The study highlights that 28% of Gen Z respondents have utilised reselling applications to sell unwanted items, earning an average of £184 over the past year. Additionally, nearly half, at 46%, have activated the 'round up' feature on their banking apps. This function rounds each transaction to the nearest pound and automatically transfers the difference into a savings account, creating a seamless saving mechanism.
Government-Backed Savings for the Future
Furthermore, a significant portion, 33%, are leveraging Lifetime ISA accounts to save towards major life goals such as purchasing their first property or planning for retirement. These accounts benefit from a generous 25% government top-up, enhancing their long-term financial security.
Balancing Savings with Occasional Splurges
Despite their focus on saving, Gen Z continues to indulge in weekly luxuries, with 23% treating themselves on a regular basis. Nearly 30% report that these small splurges, whether it's a quality coffee, dining out with friends, or a fashion purchase, help 'keep them going' without compromising their financial stability.
Shifting Spending Habits and Financial Awareness
Over the past year, 58% of respondents believe their spending habits have evolved, largely due to the rising cost of living. However, 35% attribute changes to improved planning, and 32% have gained a better understanding of personal finances. When seeking financial guidance, 44% turn to friends and family, 25% rely on money management apps, and 31% prefer social media platforms.
Sources of Financial Literacy
Approximately 24% credit YouTube and Instagram as key reasons for their generation's enhanced financial literacy. Meanwhile, 22% believe learning from previous generations' monetary mistakes has been crucial, and 23% cite growing up in an era of economic instability as a formative influence.
Expert Insights on Gen Z's Financial Mindset
Rajan Lakhani from Plum commented on the findings, stating, "Gen Z has completely redefined what 'treating yourself' looks like. Rather than reckless spending, we're seeing a generation that plans ahead, hunts for value, and uses smart saving tactics so they can still enjoy life's little luxuries."
He added, "Gen Z are often misunderstood when it comes to money, but the reality is they're one of the most financially aware generations. The 'avocado on toast' jibe is truly unfair and incorrect. Growing up against a backdrop of economic uncertainty has made many of them cautious, informed, and far more proactive about managing their finances from an early age."
Lakhani concluded, "Traditional ideas of wealth seem increasingly inaccessible, so they're more focused on control and flexibility—where budgeting, saving, and tracking spending are second nature."
