The younger generation have had to be more “realistic” about money than their parents and grandparents, with more of them saving up for a house or to pay off debts than wanting to blow their cash on a holiday, a study has suggested.
Aviva’s study into the “foundation generation” - people aged 25 to 35 who are laying the groundwork for their future - found that 36% of those questioned are scrimping to buy a house, while 34% are putting money aside to pay off debts.
A fifth (20%) are also trying to pay off their mortgage as quickly as possible, against an economic background where people are having difficulty getting real returns for their money in savings accounts due to low interest rates.
Meanwhile, only 8% of young people are saving up for a holiday and 13% to fund their hobbies or interests.
Alistair McQueen, senior workplace savings manager at Aviva, said: “There is probably a patronising mindset that this population is less engaged.
“They are carrying significant challenges. They are probably more financially equipped and more realistic than previous generations.”
The younger generation, whose typical take-home pay is £1,144, were also asked about their preferences in the next five years for saving for retirement.
The study found that 26% would prefer to save into a workplace pension, 22% into a private personal pension, and 18% through a different savings option, such as property.
Four out of 10 of the 2,200 people surveyed search to find the best buys as a way of managing their money.