The saving habits of Gen Z are shocking: the data destroys the boomer stereotypes
Smashed avocados have long been used as shorthand for Gen Z’s spending priorities but the reality is quite different.
Negative stereotypes of young Aussies consuming overpriced avos and smashed lattes have been erased by shocking new data showing that Gen Z are now the country’s most well-educated.
Young adults have been accused for years of prioritizing lifestyle over frugality, but new data from NAB has debunked this narrative.
It showed that 18-29 year olds have the strongest saving intention of any age group in Australia.
A staggering 89 percent of women in this age group and 85 percent of men put money aside.
This level of intention to save meant they were more committed to building a safety net, NAB revealed.
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![Pensions, savings and retirement plans and elderly couple reading their budget, calculating at the table at home. A partnership between a mature husband and wife while looking after debts, utilities and housing costs](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 1280 720"%3E%3C/svg%3E)
Gen Z was found to have more savings intentions than older generations who criticized their consumption.
NAB retail CEO Belinda Mamet said young Aussies should be given a lot of credit for the amount of savings they are making.
“Reducing and saving can sound boring, but our young customers can manage their money well,” he said.
But financial analysts have warned that the Aussies’ newfound financial acumen has come at a cost.
They explained to them the absurd behavior of the banks: while the youth accumulate money, the big banks drag their feet in paying them.
As these young savers build record savings, they face the urges of banks that are quick to punish borrowers but slow to reward those who give.
After the Central Bank’s decision to raise the official money rate, major lenders almost immediately announced that house prices would rise.
Days later, the interest rates that would benefit young active savers remained “under review”, with only a few lenders, including some large ones, actually passing on higher rates to savers.
Canstar’s director of data, Sally Tindall, said some banks may use a ‘wait and see’ approach to check what competitors are doing before releasing their interest payments.
“If they are passing it on to their mortgage customers, they should be passing it on to their creditors, in full,” Ms Tindall told the media.
Canstar.com.au analysis showed banks were more selective in the last round of rate hikes between 2022 and 2023 when rates went up and missed out.
Banks have been slow to act on savings account interest rates since RBA governor Michele Bullock announced a rate hike last week. Photo: Martin Ollman
Banks also offer attractive “header” rates with heavy strings attached.
This includes having to make regular payments to increase the balance, without withdrawing money. Those who failed to meet these conditions were often given a rating of 0.1 percent.
Canstar noted that during the 2022 and 2022 rate rises, the average interest rate for bonus saver accounts rose by 4.05 per cent, while the base rate – the rate earned if savers do not meet their bonus conditions – rose by an average of just 0.42 points.
The Australian Competition and Consumer Commission (ACCC) found that almost two out of three customers with “bonus” accounts failed to qualify for the headline rate, meaning the bank was able to tap into Gen Z’s hard-earned cash at little cost.
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