UK Youth Prioritise Travel, Wellness Over Traditional Savings Goals

By HOAR Team 31 March, 2025 5 mins read 34 Views

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Short-Term Ambitions Gain Momentum

Young adults across the UK are shifting their financial focus towards immediate experiences such as travelling and wellness retreats, as well as investing in cryptocurrency, rather than setting long-term savings goals.

Travel Tops the List of Financial Goals

A recent survey of 2,000 individuals aged between 18 and 35 revealed that half of the respondents have money objectives planned for the next six to eighteen months. Out of these, 39% aspire to fund travel adventures, making it the most popular short-term goal. Additionally, 24% are saving to launch their own businesses.

Diversified Savings for Health and Life Events

Beyond travel and entrepreneurship, 20% of young savers are setting aside funds for health and wellness retreats, 15% plan to save for marriage, and 13% are aiming to purchase electric motors. Interestingly, 12% are reserving money for the upcoming festival season.

Multiple Savings Accounts on the Rise

Nearly all young savers (97%) utilise multiple savings accounts, with 45% managing three or more distinct pots. This method helps them allocate funds for various objectives efficiently.

Need for Enhanced Savings Strategies

Despite their clear savings goals, 72% of young savers feel they could benefit from improved savings strategies to achieve their aims. However, only 32% have taken advantage of their Individual Savings Account (ISA) allowance for the 2024/25 tax year, though 35% of those who haven't plan to do so before the April deadline.

NatWest Launches £5K Challenge to Foster Saving Habits

The survey, conducted by NatWest, aims to inspire young people to develop consistent monthly saving habits through the Couch to Cash: the £5K Challenge. Partnering with Team GB Olympic gold medallists Alistair and Jonny Brownlee, the bank provides practical tips to overcome common saving hurdles.

A Generational Shift in Saving Priorities

Mo Watt, a savings expert at NatWest, highlighted that 47% of young adults believe their saving objectives differ significantly from those of their parents at the same age. This research underscores a notable generational change in financial attitudes.

Long-Term Savings Still a Goal

While short-term objectives dominate, 74% of young people with long-term savings goals express a desire to save more towards these aspirations. However, the shift towards immediate rewards indicates evolving financial priorities among the younger generation.

Frequently Asked Questions

What are the risks associated with investing in the stock market?

Investing in the stock market involves several risks, including market volatility, economic downturns, and company-specific factors that can lead to losses. Investors may also face liquidity risk, where they cannot sell an investment quickly without incurring a loss. Diversification and thorough research can help mitigate these risks.

What are credit scores and why are they important?

Credit scores are numerical representations of an individual's creditworthiness, calculated based on credit history, payment behavior, and debt levels. They are important because they impact the ability to obtain loans, credit cards, and favorable interest rates, affecting overall financial health.

What are the main functions of money?

The primary functions of money are as a medium of exchange, facilitating trade; a unit of account, which provides a standard measure of value; a store of value, allowing individuals to save and transfer purchasing power over time; and a standard of deferred payment, enabling credit transactions.

What is the difference between saving and investing?

Saving typically involves setting aside money in a secure account for short-term needs or emergencies, while investing involves using money to purchase assets like stocks or real estate with the expectation of generating a return over the long term. Investing carries higher risks but offers the potential for greater rewards.

How can I start saving for retirement?

To start saving for retirement, begin by establishing clear retirement goals and determining how much you need to save. Contribute to employer-sponsored retirement plans, such as a 401(k), and consider opening an Individual Retirement Account (IRA). Regular contributions and taking advantage of compounding interest can significantly boost your retirement savings over time.

What is the definition of money?

Money is a medium of exchange that facilitates transactions for goods and services. It serves as a unit of account, a store of value, and a standard of deferred payment, allowing individuals to compare the value of diverse products and services.

What are the benefits of having an emergency fund?

An emergency fund provides financial security by offering a safety net for unexpected expenses, such as medical emergencies or job loss. It helps prevent debt accumulation, reduces stress, and allows for better financial planning, ensuring that individuals can navigate unforeseen circumstances without significant hardship.

Statistics

In 2020, the average retirement savings for Americans aged 60 to 69 was approximately $195,000, according to Fidelity.
As of 2021, the average American household had approximately $8,400 in credit card debt, according to Experian.
The average return on investment for the S&P 500 over the past 90 years is about 10% per annum.
A survey by the American Psychological Association found that 72% of Americans reported feeling stressed about money at some point in the past month.
Research by the National Bureau of Economic Research found that individuals who receive financial education are 25% more likely to save than those who do not.
According to the World Bank, around 1.7 billion adults worldwide remain unbanked, lacking access to basic financial services.
The average cost of raising a child in the U.S. is estimated to be around $233,610, according to the U.S. Department of Agriculture.
As of 2021, the median household income in the U.S. was approximately $67,521, according to the U.S. Census Bureau.

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How To

How To Set Financial Goals That Stick

Setting financial goals that stick begins with defining what you want to achieve, whether it’s saving for a home, paying off debt, or building retirement savings. Use the SMART criteria—Specific, Measurable, Achievable, Relevant, Time-bound—to structure your goals effectively. Write down your goals and break them into smaller, actionable steps to make them less overwhelming. Establish a timeline for each goal and regularly review your progress to stay motivated. Adjust your goals as necessary to reflect changes in your financial situation or priorities, ensuring they remain relevant and attainable over time.

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