'Spend now, save later' mindset is stalling savings for young Brits

Under-35s are embracing a ‘spend now, save later’ mindset when it comes to planning ahead in their finances – with a quarter (25%) having £500 or less saved.

While 18–35-year-old Brits have an average of £9,579 in savings, a quarter (25%) don’t have any savings set aside for emergencies, with half (49%) citing a lack of disposable income and 29% prioritising saving for other things instead.

New research of 2,000 young people aged 18–35, commissioned by NatWest, has delved into the savings behaviours of younger generations– with 60% saying they rely on bonuses from work or gifts from family to top up their savings pot each year.

NatWest is encouraging young people to build healthy monthly savings habits with Couch to Cash: the £5K Challenge. To mark the launch, Team GB Olympic gold medallists Alistair and Jonny Brownlee unveil the challenge in a light-hearted video, as well as providing some helpful tips to tackle the key barriers to saving.

The study revealed the top hurdles for young Brits when it comes to saving are:

1. Cost of living pressure: Lack of disposable income to put into savings (33%)
2. Emergency first: Only having enough put away for an emergency (=17%)
3. Debt repayment: Paying off credit cards / student loans / overdraft (=17%)
4. Economic uncertainty: Focussing less on saving due to economic factors that are out of a person’s control (16%)
5. YOLO lifestyle: Prioritising short-term plans or activities over longer-term goals (15%)
6. FOMO: Fear of missing out on activities with friends (12%)
7. Irregular income: A freelance or ‘gig worker’, making it more difficult to put money away regularly (=10%)
8. Changing life milestones: Not having traditional goals to save for i.e. kids, engagement ring, house deposit (=10%)
9. Not knowing where to start: Uncertainty on how to begin planning (9%)
10. Lack of financial knowledge: About how and where to save (8%)

Despite those aged 18-24 saving an average of £195 per month, and those aged 25-34 saving £273 each month, 7% of under 35's say they are not able to save regularly.

Three quarters (75%) would like to save more in 2025 than they did last year, with the research revealing young Brits are looking to save an average of £3,775 over the next 12 months and £19,920 over the next five years.

To help them reach these goals, 70% say a tool that allows them to track their progress and set savings targets would be helpful.

Other than a contribution to a workplace pension, 45% of young Brits are not actively saving for their retirement, with 17% stating they won’t be thinking about saving for retirement for ‘at least another 10 years’.

No strangers to a challenge, Alistair and Jonny know what it takes to work towards a long-term goal and are calling on the younger generation across the country to think about their own saving challenges and ambitions– and most importantly, get started on working towards them.

Alistair said: “Any challenge can feel overwhelming to begin with, but breaking it down into smaller steps can help it feel more achievable. Both Jonny and I have always been believers in starting small in order to work up to the big things we want to achieve.”

Jonny added: “Whether you’re looking to save £5k, £500, or even £50 in 2025, it’s important to think about your own savings goal now to help you plan ahead for your future.

“Starting is often the hardest part, but by setting yourself a target that’s right for you and planning the steps to get there, that’s already the first part of the challenge complete!”

NatWest’s Mo Watt said: “Savings can feel like a difficult task, especially for younger adults, with one in 10 telling us they don’t know where to start. Breaking down your saving ambitions into smaller targets can help make the process more manageable, and we encourage our customers to take a little more action with the help of our Savings Goal Tool. Starting small today means you’re already taking action to plan for your tomorrow.”

To join in the Couch to Cash: the £5k Challenge, you can set a monthly savings goal to reach your targets - whether that’s £5k or an amount that feels right for you, based on how much you can afford or how quickly you want to reach your goal. NatWest customers can use the Savings Goal Tool within the app to schedule regular payments and track their progress.**

For more information on savings and Couch to Cash: the £5k challenge, visit natwest.com/couchtocash