BABY Boomers save the most money – but Gen Z reckon they know how to make their money work hardest for them.
A poll of 2,000 adults revealed 66 per cent of those under 27 years old believe they can grow their money best.
However, it was Millennials who were most likely to utilise a stocks and shares ISA.
Boomers used savings accounts and cash ISAs most frequently but were the generation also most likely to keep money in their current account.
Millennials save most annually, £5,036 a year on average, but it’s Boomers who have most tucked away overall, with £27,966 held aside.
Jen Adams from Virgin Money, which commissioned the research as part of their “investing made extra” campaign, said: “The study has been quite fascinating, as different generations approach money in varying ways.
“Gen Z adults, while saving the least, are typically more dynamic in trying something new and open to investing – whereas older generations prefer to keep their funds easily accessible, in cash ISAs or current accounts.
“That said, all generations gravitate towards a predictable rate of return on savings accounts and are potentially missing out on making their money work harder for them by investing.”
Interestingly, it’s Gen Z who were most inclined to save anything they can, while Millennials focus on it the least and are also most dissatisfied with their revenue growth.
And 38 per cent of the youngest generation had already dabbled with investing their savings, with 42 per cent still considering doing so – both the highest proportion of any age group.
Across all respondents, high living costs, fear of risk and low income stopped them from growing their savings more.
When it comes to plans for their cash, 30 per cent were focused on spending it all, with retirement in mind rather than passing on as inheritance.
While 42 per cent prefer to put their money into savings and don’t invest, only eight per cent put more into investments than savings.
Confidence has increased since a change of government – with 32 per cent believing it’s a better time to save with political stability, leadership and new policies the top reasons.
Four in 10 said they’d like to explore investing but are held back by their knowledge, with 47 per cent having money set aside that they want to grow in a new way should an opportunity arise.
Jen Adams, from Virgin Money, added: “The findings have shown there’s a lot more confidence around saving than investing, which is something the financial services regulator (FCA) have set a target on.
“They’re aiming to reduce the amount of people who have over £10,000 in cash savings by 20 per cent by the end of 2025.
If you are trying to find the best savings rate there are websites you can use that can show you the best rates available.
Doing some research on websites such as MoneyFacts and price comparison sites including Compare the Market and Go Compare will quickly show you what’s out there.
These websites let you tailor your searches to an account type that suits you.
There are three types of savings accounts fixed, easy access, and regular saver.
A fixed-rate savings account offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.
This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account.
Some providers give the option to withdraw but it comes with a hefty fee.
An easy-access account does what it says on the tin and usually allow unlimited cash withdrawals.
These accounts do tend to come with lower returns but are a good option if you want the freedom to move your money without being charged a penalty fee.
Lastly is a regular saver account, these accounts generate decent returns but only on the basis that you pay a set amount in each month.
“However, what people don’t tend to consider is that saving and investing work hand in hand, enabling short and longer-term goals to be realised.
“There’s risk attached to anything in life but investing while saving can provide another way of growing your money.
“That’s why we’ve launched our new offer giving investors the opportunity to save into a fixed rate savings account with a market-leading rate.”
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