Gen Z is having a tough time. Due to the current economic climate, many Gen Zers are finding it hard to become homeowners, with even more admitting that high rent prices mean they need to stay with their parents for longer. Consequently, some have turned to financial support means available to them as international law firm Charles Russell Speechlys reveals Gen Z’s finance and savings trends.
In its study which examined 4,000 people, Charles Russell Speechlys found that 43 per cent of Gen Z adults would use financial support, such as inheritance or gifts from parents or grandparents, to save for their future, while a third would buy a property outright (33 per cent) or put it towards a deposit (32 per cent).
Sally Ashford, partner, Charles Russell Speechlys: “Gen Z has grown up in a challenging financial environment and the impact on their attitudes to wealth is evident. While you might think that younger people have a more laissez-faire approach to their finances, we’re seeing Gen Z start to think earlier about their financial plans both as they progress into adulthood and later life.
Time for caution
However, there was an almost equal amount of Gen Zers that said they would sparingly use financial support. Only 22 per cent would use financial support to pursue a one-off big purchase, 20 per cent would use it to travel, and just 17 per cent would share it with family or friends. Due to high rent and homeowning prices and piling student debt, many are showing signs of caution.
Nearly 1 in 4 (23 per cent) young people said they go to financial advisors or professionals for investment advice or information, whereas much fewer (15 per cent) said they would go to social media platforms. Moreover, just six per cent of Gen Z said they don’t seek advice for financial decisions at all, compared to over a quarter (26 per cent) of Millennials.
The research also shows that Gen Z wants to invest sustainably but prioritises financial outcomes. Thirty-five per cent want their money to make a positive impact, but only if it results in their expected financial outcomes. However, eight per cent of Gen Z adults said they only prioritise financial outcomes, which jumps to 31 per cent for Millennials, showing the younger generation to be more selfless.
Open conversations about finance
Despite being more cautious, Gen Z adults are generally more open to talking about their financial uncertainties, with the study revealing that 81 per cent have discussed what they might inherit in the future or the inheritance they’re planning to leave. By contrast, older generations are less likely to have talked about their inheritance (68 per cent).
When it comes to leaving their own inheritance, 54 per cent of Gen Z adults said they would leave their inheritance to their children – whether or not they have had them yet. This was mirrored by 53 per cent of those older than Gen Z.
Ashford continued: “It is useful to have these kinds of difficult conversations about wills and inheritance sooner rather than later to ensure you are prepared for unexpected events, but these topics have traditionally been a bit taboo for older generations. Hopefully Gen Z’s attitudes to wealth will make it easier for these discussions to take place with parents and older generations”
When it comes to charity, 71 per cent of Gen Z adults believe it’s important to donate to charity. However, 54 per cent of Gen Z would rather save for their future than donate to charity, and just 38 per cent say they include charity donations in their monthly budget.
William Marriott, partner, Charles Russell Speechlys: “Financially savvy and equipped with more resources and knowledge than previous generations, Gen Z understand the importance of financial planning as early as possible.
“When it comes to financial literacy, younger people are worrying about planning their financial future and not spending their money on unnecessary or extravagant things, but above all, they worry about saving money. On the other side, we’re also seeing that they are more curious and interested in learning how products and services work”.
