Gen X, Y and Z: changing attitudes to money and finance

The lines between Gen X, Y and Z often get blurred, with the label ‘millennial’ being used as broadly as ‘baby boomer’ once was. 

When it comes to personal finance, the generations each tell a different story with some fascinating key takeaways.

We take a closer look at Gen X, Y and Z and their attitudes and priorities regarding personal finances below. 

Let’s start with Gen X, the MTV generation

Born between 1965 and 1980, this generation saw the dawn of the Internet, the birth of mobile phones, ATM machines, and credit card debt. 

Now, it’s this generation who are the most likely to face financial hardship in retirement.  

A significant proportion of Generation Xers juggle competing financial priorities including caring for family members, debt and mortgages with volatile incomes.

Research from the International Longevity Centre UK indicates that one in three is at risk of retiring with an inadequate income. 

Unbiased research commissioned in April 2022 revealed that 53% of those surveyed fear they won’t have enough income to survive financially when they stop working.

Moreover, 63% of Brits have no idea what a pension pot should look like when it comes to funding the kind of retirement they’d like. 

For Generation X, the financial focus is on saving and planning for retirement. 

What about Gen Y? 

This generation, born between 1981 and 1996, is best known as the millennial generation.

Digital first and social media savvy, this generation has embraced online banking but is lacking financial education.

Typically, at the age of 30, their income is lower than in previous generations and they struggle to escape the rental trap in an expensive property market. 

The rise of the portfolio career and gig economy is also having a financial impact on Gen Y, with millennials facing a pension gap if they don’t take more action to save for their retirement.

Greater financial instability has also been driven by student debt, which has soared from an average of over £10,000 in 2007 to nearly £45,000 in 2022, according to Statista. 

Interestingly, this generation is also the first to view investing differently.

The rise in start-ups, crowdfunding and online apps specialising in investments means more millennials are exploring different ways of financial planning. 

Planning is the key word here, and Generation Y wants a structured approach to financial planning, whether saving for a big-ticket item or consolidating their debts. 

Who are Gen Z? 

For those born during 1997-2012, it’s all about Generation Z. These are the digital and social media natives who have never known a landscape without either. 

Largely because Gen Z uses social media as a key source of news and as a means to mobilise, this is a generation powered by cause and belief.

From climate change action to gender identity, Gen Z are seen to be the generation that will make fundamental decisions for the future of society. 

Gen Z’s relationship with money is also very different.

While Gen X come from a cash-first world, millennials have seen a transition from cash to Chip and Pin, and Gen Z are fast moving to a contactless, cashless society. 

As such, Gen Z are used to online data and have more sophisticated digital financial expectations such as spending analytics.

Research by HSBC UK found that nearly half of Gen Z respondents save 20% or more of their monthly income, making them the least likely generation to take on consumer debt. 

These more sophisticated expectations and goals are key drivers for how Gen Z will manage their money and plan for the future. 

From Gen X through to Z, the rules of financial planning have certainly shifted, which may explain the rise in financial coaching.

Like a personal trainer for your money, financial coaches take a holistic view of your money and work with you to plan your financial goals and future.