Posted on April 4th, 2011 | Categories - Savings
Younger people are staying at home and saving their earnings to buy their first home.
Clever savers are putting their cash into a savings account from a young age.
Savers in their 20s are managing to set aside £258 a month, signalling that the credit crunch has created a new breed of financially savvy savers who are keen to prepare for their futures, according to a new study.
A survey from Barclays Bank found that workers in their 20s, earning about £17,000, are squirreling away just over £250 a month; a prudent move that is leaving them better off than their parents were at the same age.
These savers were described as Young, Ultra Forward Thinking Savers (Yufties) – the majority of this group live at home with their parents and save their cash instead of spending it on clothes and going out. Instead they choose to save about 18% of their earnings so they can put the cash towards a deposit for a house, a wedding or a car.
The figures have led experts to predict that about a third of 20 to 29-year-olds will be able to purchase their first home by the time they reach 30, which is six years earlier than previous generations. A third of those in the same age group already have £1,900 of cash in a savings account.
A quarter of respondents said they hope to trade up to a larger property by the time they hit 30 and almost half of this figure said they expect to be married by then too.
Andy Gray from Barclays said: “Despite higher incomes, saving becomes more difficult in our 30s. These 20-somethings have a clear message for the rest of their generation – start now”.