Young people seek to boost savings to offset cost of living squeeze
Young people are seeking to save more money in 2026, as the cost of living crisis focuses minds on careful financial management.
According to the latest City PM polling from Freshwater strategy, over half of Britons are aiming to save money, but a staggering 70 per cent of 18 to 34 year olds are prioritising bulking up their savings.
It comes as more young workers scramble to offset tax changes and deal with challenging economic conditions.
The latest Autumn Budget introduced an array of policy changes, with young professionals in particular set to shoulder a large tax burden, including the decision to extend the income tax threshold freeze until 2031 and freeze student loan repayment thresholds..
Driven by rising wages the fiscal drag will pull a significant number of workers, including young professionals, into higher tax brackets, with roughly six percent of the UK’s 34m strong workforce set to earn above £100,000 in the next tax year.
The freeze will also hurt those seeking to advance their career, with 51 per cent of young people looking to do so, as wage increases that come from climbing the corporate ladder will likely be swallowed by the higher tax band.
Among older Millennials and Gen X paying off debt was the most pressing concern, while retirees were looking to use their funds to take a holiday or travel, emphasising the different financial goals among generations.
Despite older Brits looking to head somewhere sunny, having a rainy day fund was still a crucial goal for the year ahead, with nearly six in ten 35 to 54 year olds aiming to do so alongside 35 per cent of over 55s.
Financial pessimism on the rise
The pull to save more money also comes as Brits feel increasingly pessimistic about the state of the economy and public coffers, with many bracing for a downturn regardless of government promises that people will begin to feel better off in the next few months.
Over 70 per cent of people felt gloomy about the cost of living crisis, with many stretching monthly wages to pay for high-cost household essentials including energy bills, food and rising rent.
This left 66 per cent stressed over paying their taxes working out their household budget while 62 per cent expressed concern over the state of the economy.
Interest rate woes
Many also expressed frustration over interest rate cuts by the Bank of England amid a drop in monthly returns on ISAs, leaving savers with thinner margins. But many still refuse to leave cash and step into the stock market.
The negative attitude towards UK investment comes despite the Treasury’s push to get more people to invest in stocks, introducing measures including slashing the cash ISA ceiling to £12,000 and a stamp duty holiday for newly listed shares, due to fearing losses.
Jordan Meyers, head of research at Freshwater Strategy, said: “Voters are entering 2026 on the same poor economic footing as last year, with further tax pain expected.
“It is up to the government to demonstrate that things are beginning to turn around and give Brits reason to be optimistic about the future.”