Financial confidence decreases with age

2 min read

Gen Z is the most ‘financially confident’ demographic. Our 2024 Global financial wellbeing report reveals a stark difference in financial confidence between generations.

The report surveyed over 11,500 employees, across 17 countries, and focused on employees’ financial goals and if they expected to achieve them as part of our annual Global Financial Wellbeing Report.

The results highlight a negative link between financial confidence and age. Almost two-fifths (38%) of Gen Z employees (aged between 16 to 24) said they are ‘very confident’ they will reach their goals, and this dropped down to less than a quarter (23%) for Gen X employees (aged between 45 to 54) who said the same.

Gen Z’s financial approach

Interestingly, the report identifies a generational divide between where employees are accessing information to build financial skills and knowledge. Videos on social media sites (such as TikTok and Instagram) are most popular (31%) among Gen Z, followed by online courses and tutorials (30%). For Gen X, only 14% are turning to these apps for advice.

Tim Perkins, co-founder and CEO at nudge, commented on the findings. “Creators on the likes of TikTok have done a good job at normalizing ‘finance talk’ among younger workers, which has traditionally been viewed as a ‘taboo’ topic. We’ve seen this translate into trends such as ‘loud budgeting’ and more openness around savings, salary, and even financial hardship.

“However, financial advice and ‘finfluencers’ on social media aren’t always reliable, or qualified. Younger, more impressionable workers run the risk of developing poor financial habits, or a false sense of security, if this type of short-term-view, unrealistic content is their main source for building financial literacy.”

In the UK, over two thirds (67%) of Gen Z workers say they have a financial plan in place to achieve their goals, yet a similar percentage admit this is only an ‘informal financial’ plan (66%) that spans three years or less (60%). For Gen X, a financial planning professional is the most popular source of financial information (29%), and the majority (64%) of these workers say their plan is long-term, extending beyond three years.

Gen Z’s financial priorities

When asked in what ways money was most important to them, allowing for financial freedom (40%) and security (37%) came out on top for Gen Z. Gen Z employees also appear to be more hedonistic in their financial goals. 72% of younger employees said saving for a luxury purchase was a financial goal of theirs, compared to 56% of Gen X (45-54). 25% said money was most important to them as it allowed for new experiences, followed by the purchase of luxury items (24%) and providing ‘power and influence’ (15%). Only 15% of Gen X said the same for luxury items, and 5% for ‘power and influence’. Money is more important to Gen X for functional finances such as debt obligations (28% for Gen X vs. 19% for Gen Z) and saving for retirement (37% for Gen X vs. 9% for Gen Z), which suggests their financial confidence may not be ‘less’ than Gen Z’s, but more realistic.

Tim Perkins adds: “The impact of social media on financial wellbeing stretches far beyond long term vs. short term budgeting. With influencers and celebrities openly flaunting their wealth, clothes and holidays on the internet, younger audiences (who are more engaged on social media) likely face more peer pressure to present a lifestyle, and more financial confidence, online.

“We look forward to producing this Global Financial Wellbeing Report every year, as it highlights these issues clearly and gives us a better idea of what is needed to improve financial literacy for all. Navigating the financial landscape is getting harder, especially for younger generations in the social media age. There’s clearly a need for more trusted guidance and support for Gen Z when it comes to finances, and this is an opportunity for employers to make a difference with their benefit offerings.”

Want more global trends like this? Download the full report and find out the latest financial wellbeing sentiments, goals and motivations impacting employees today.