New figures from mutual society Shepherds Friendly suggest a stark generational divide in saving habits across the UK, as nearly a quarter of adults admit to putting nothing aside each month — despite continuing financial uncertainty.
According to the data, 23% of people are failing to save regularly, leaving them exposed to financial shocks such as job loss, rising bills or unplanned expenses. But the picture varies widely by age, with younger generations outperforming their older counterparts in both the frequency and volume of savings.
Contrary to the stereotype that younger adults struggle most with money management, the 18–24 age group emerged as the nation’s most consistent savers, with only 12% saying they save nothing each month.
In contrast, savings behaviour declines sharply among those in middle age. More than a third of 45–54 year olds (38%) reported saving £0 per month, the highest proportion of non-savers across all age groups.
A further 35% of those aged 55–64 also admit to not saving, raising concerns about financial preparedness as people approach retirement.
KEY DRIVERS
The pressures of mortgages, family responsibilities and rising living costs are likely to be key drivers behind this midlife dip in saving, the report suggests.
The figures also reveal that among those who do save, the younger generation is putting away more each month than their elders. Adults aged 25–34 are saving an average of £529 per month, closely followed by 18–24 year olds at £513. This compares with just £310 a month for savers aged 55–64.
Savings habits diverge even more sharply between those who invest and those who don’t. Across every age group, investors were found to be saving more than double the amount set aside by non-investors. For instance, non-investors in the 45–54 age bracket save just £71 a month, compared to £477 for those who are actively investing.
Despite this, nearly half (47%) of adults say they have never considered investing, suggesting a widespread lack of awareness or confidence in alternative saving strategies.
Derence Lee, chief finance officer at Shepherds Friendly, urged people to reconsider their financial priorities regardless of age: “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.”
Lee advocates a tiered approach to savings, starting with an emergency fund held in an easy-access account to provide immediate liquidity without penalties. For longer-term goals, such as homeownership or retirement, tax-advantaged vehicles like ISAs and pensions are key.
Younger savers, he noted, are making the most of the government’s 25% bonus via Lifetime ISAs, while those in their thirties and forties are increasingly turning to Stocks and Shares ISAs to counteract inflation and boost long-term growth.
“Pensions also play a critical role – not just later in life but from the moment you enter the workforce,” he added.
“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.”
While those aged 55–64 are currently among the least active savers, the data shows an uptick in saving behaviour post-retirement, with over-65s setting aside an average of £379 a month. This could reflect more predictable incomes from pensions and fewer outgoings such as mortgage payments or dependent children.
Lee concluded that the right mix of saving strategies — tailored to both short-term needs and long-term goals — can help individuals of all ages build resilience and financial confidence.
