- New research shows that Gen Z would use financial support from parents to prioritise saving for their future and deposits for a mortgage over one-off purchases and travelling.
- Four in five (81%) Gen Z adults have had a conversation about what they might inherit in the future, more than older generations.
- Over a quarter (26%) of Gen Z adults seek advice for financial decisions, compared to just 6% of Millennials.
Gen Z is emerging as a generation of financial planners, balancing economic independence and wealth building, according to new research.
A new study from international law firm Charles Russell Speechlys, which sought the views of 4,000 people, found that more than 2 in 5 (43%) 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%) or put it towards a deposit (32%).
By contrast, only 22% would use financial support to pursue a one-off big purchase, a fifth (20%) would use it to travel, and even less (17%) would share it with family or friends.
This cautious approach is likely a result of Gen Z being a generation under financial strain, with low rates of homeownership and record rents forcing many to live with their parents well into their twenties, whilst facing thousands of pounds’ worth of student debt and potentially an uncertain retirement.
Conversations about the future
Going hand in hand with being financially cautious, Gen Z adults are more likely to be open to talking about inheritance.
Four in five (81%) 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%).
When it comes to leaving their own inheritance, over half (54%) 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 those older than Gen Z (53%).
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.
“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”
A generation of investors
The research also found that a cautious attitude towards building wealth is clear amongst young people.
Nearly 1 in 4 (23%) young people said they go to financial advisors or professionals for investment advice or information, whereas much fewer (15%) said they would go to social media platforms. Moreover, just 6% of Gen Z said they don’t seek advice for financial decisions at all, compared to over a quarter (26%) of Millennials.
The research also shows that Gen Z wants to invest sustainably but prioritises financial outcomes. 35% want their money to make a positive impact, but only if it results in their expected financial outcomes. However, 8% of Gen Z adults said they only prioritise financial outcomes, which jumps to 31% for Millennials, showing the younger generation to be more selfless.
When it comes to charity, seven in ten (71%) Gen Z adults believe it’s important to donate to charity. However, half (54%) of Gen Z would rather save for their future than donate to charity and just two-fifths (38%) 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”.
