Struggling Financially to End Romantic Relationships Affects Approximately 20% of Youths
In today's economic climate, young adults under the age of 40, particularly Gen Z and millennials, are finding it challenging to maintain emergency funds due to a combination of high living costs, limited income growth, financial stress, and heavy reliance on credit.
One of the key factors contributing to this trend is the high cost of living. Essential expenses such as rent, groceries, utilities, and dining out consume a significant portion of young adults' income, leaving little left for savings.
Younger adults often start their careers with fewer job prospects and lower wages compared to previous generations at a similar age, making it harder to accumulate savings. This financial strain is further compounded by the psychological impact of money-related stress on mental health, discouraging some from planning for the future or saving.
Lack of financial education or motivation, easy access to credit, and a tendency to rely on it, insufficient financial support, and decreasing financial assistance also play significant roles in this issue.
Statistics show that around 34% of Gen Z (ages 18-28) and 28% of millennials (ages 29-44) have no emergency savings at all in 2025, compared to only 16% of baby boomers. Moreover, over half of Gen Z do not have enough savings to cover even three months of expenses. In emergencies, over half of young adults would likely use credit cards rather than existing savings, indicating a reliance on borrowing rather than cash reserves.
OneFamily, a Lifetime Isa provider, recently surveyed over 3,000 young adults and found that single savers put aside an average of £301 per month, which is around half the £609 saved by those in relationships. The company offers a 4.42% cash Isa and an Investing Isa with no fees on 30 funds. They also provide a £20 off motoring offer.
It's essential to note that the specific timeframe or location of the survey or the data is not provided. Additionally, taking out a product from OneFamily may result in This is Money earning a commission. The editorial team at This is Money chooses these offers. The terms and conditions apply on all offers from OneFamily.
Experts recommend keeping between three and six months' worth of essential spending in cash savings as an emergency fund. Given the average monthly cost of essentials being £2,062, according to a report from stockbroker Hargreaves Lansdown, an adequate emergency fund would be between £6,186 and £12,372. Building such a savings pot supports financial resilience and less vulnerability to life's ups and downs, as emphasized by OneFamily boss Jim Islam.
- To build a financial cushion, young adults should consider setting aside a portion of their income for savings, aiming for a minimum of three to six months' worth of essential expenses, as suggested by experts.
- While single young adults save an average of £301 per month, a survey by OneFamily found that those in relationships save around £609 per month, indicating a potential advantage in joint financial management.
- Struggling to maintain emergency savings, many young adults are relying on credit in emergencies, which can lead to increased debt and financial stress, highlighting the importance of investing in insurance coverage and evaluating personal-finance strategies to improve relationships with money.
