Majority of 18 to 34-year-olds lack savings to cover income shocks, survey finds

Two-thirds of 18 to 34-year-olds do not have adequate savings in place to deal with financial shocks, a survey has found.

Only a third (33%) of people in this age group said they have enough money put away to cover at least three months of essential outgoings – the minimum level that is often recommended.

Nearly three in 10 (29%) 18 to 34-year-olds have less than one month’s worth of savings, the research from Yorkshire Building Society found.

But the survey involving about 2,000 people also found two-fifths (41%) of 18 to 34-year-olds said they have been able to increase the amount they save each month during the Covid-19 pandemic.

Yorkshire Building Society said the survey is part of its ongoing campaign to improve financial resilience, encouraging non-savers to start putting money away.

Tina Hughes, director of savings at Yorkshire Building Society, said: “Now more than ever, in the current economic uncertainty, it’s important that we help people to save and build up their financial resilience.

“One of the things the Covid-19 pandemic has demonstrated is that anyone could find themselves in financial difficulties and as our research highlights, 29% of young people have less than a month of savings to sustain themselves and only a third have managed to build up a strong buffer of three months or more.

“We want to continue to help people establish a healthy savings pot and improve their financial wellbeing and are trying to promote a ‘save first’ culture to help people put aside money that would enable them to withstand a financial shock without relying on credit or debt.”

The society has support online for people looking to budget and save at www.ybs.co.uk/savings/personal-budget-calculator.