To mark UK Savings Week, the Saffron Building Society launched a survey to better understand the UK’s generational saving habits, and the findings highlight a significant financial reliance on parents and grandparents.

While the bank of Mum and Dad is helping to keep today’s young people afloat, data suggests that unless savings habits change, it may not be open for the next generation.

Reliance on parents and grandparents 

Findings reveal that a quarter of 18–34-year-olds save less than £100 per month, while over a quarter (27%) of 35-55+-year-olds save more than £1,000 per month.

Because of the cost-of-living crisis, the younger generation is not able to save larger sums of money, causing them to be more likely to rely on parents and grandparents for substantial financial support.  One in five 18-34-year-olds have significantly benefitted from money from parents compared to only 1 in 10 (11%) for 35-55-year-olds and 55+-year-olds respectively.

The financial support received by older generations was to help with major life expenses like housing and education.

Stress and pressures felt by parents 

While the younger generation is accessing financial support from their parents and grandparents, the survey reveals that the pressure to deliver this support is being felt by parents across the UK.

Only 1 in 10 (12%) of parents surveyed said that they felt very confident that they could financially support their children through their savings, with many citing concerns about how this may impact their offspring further down the line.

Over a quarter (27%) of respondents said that it might cause their children to delay purchasing a house, with a further quarter (25%) saying that they might take on extra debt to cover their education.

It appears that parents are growing concerned that other large life decisions will also be impacted, with nearly a fifth (17%) saying their children might even delay having a family.

The intergenerational shift 

The survey reveals a seismic intergenerational shift in the financial support being offered, with today’s younger generation much more likely to receive help than their parents and grandparents were.

To get a clear understanding of the change across generations, the survey asked people who are now parents and grandparents themselves what support, if any, they received in their youth.

Parents today are significantly more likely (59%) to have received money from their parents or grandparents when they were younger, in comparison to just 48% of grandparents.

Parents are also significantly more likely to have received substantial financial support towards financing major expenses like education or housing (35%), compared to grandparents (21%).

Healthy saving habits start young 

With the youth of today more reliant on support from their elders, and the apparent strain and pressure this is causing for parents, it’s fair to say that our younger generation needs to start thinking about how they can plug that gap.

As previously stated, the survey shows that a quarter of 18-34-year-olds are saving less than £100 per month, which is a stark difference from their older counterparts, but all is not lost.

Young people may not have as much disposable income as the older generations but every little helps – by starting small and saving little and often, that savings pot will soon add up.

But how do we combat that firefight attitude?  Real change comes from forming and nurturing healthy savings habits from a young age.

Data reveals a third of those who had a savings account as a child said it had a major influence on their choice to save as an adult.

Furthermore, providing children and grandchildren with a savings account in their childhood could help them be better financially equipped for their future. Of those who had a savings account as a child 86% said it positively influenced their savings habits later in life.

Kelly Bixby, Head of Retail at Saffron Building Society said: “Our research shows that establishing healthy saving habits from a young age can increase your ability to save into adulthood.  Saving during a cost-of-living-crisis can feel like a big challenge, and for some, it may not be a viable option at all, but at Saffron Building Society, we are actively encouraging people, where possible, to save little and often as those small pots of money can really add up over time.

“The reliance that the population has on the older generations is startling but understandable given the economic instability we’ve felt as a nation over the last four years.  We’d encourage parents with children to think about opening a children’s savings account because creating and nurturing that habit for your offspring will go a long way towards setting them up in the future.”