Gen Z Is Losing Confidence in the UK Economy

o0jhoz7861ihjrmpwam[l88p_media_dl_2.png GfK, Bloomberg

Article content

(Bloomberg) — Gen Z is becoming less sure about whether Britain’s economy is working for them, as high unemployment and low savings rates leave younger people feeling pessimistic about establishing their careers and buying property.

Article content

Consumer sentiment across all age groups was dented in April, data from GfK show, as household budgets were hit by a record surge in petrol prices triggered by the Middle East conflict. 

Article content

Article content

Article content

But while confidence among over-50s has largely recovered since then, consumers aged 16 to 29 have become more skeptical. In absolute terms, younger people continue to be more upbeat about the economy than other cohorts, according to GfK’s data. But the gap between the generations has narrowed considerably since the end of last year.

Article content

Article content

GfK’s confidence tracker for 16- to 29-year-olds declined to minus two in June, down from 18 in December. Among 50- to 64-year-olds, sentiment was unchanged over that period at minus 41, and declined just one point to minus 39 among those aged 65 and above.

Article content

“Young people were probably more hopeful for change” when the Labour Party came into power in 2024, said Neil Bellamy, consumer insights director at GfK. “A lot of that optimism didn’t last.” 

Article content

He added that older, wealthier people took advantage of high interest rates after the pandemic to boost their savings, while less affluent households struggled with daily essentials. “Younger people just have less buffer in life, in terms of when things do go wrong.”

Article content

The UK economy is fragile and some of its weaknesses are particularly tough on younger people. Entry-level jobs have become scarcer as employment costs increase and artificial intelligence advances, while rising living expenses and mortgage rates are making it hard to get on the property ladder.

Article content

Article content

About one in six 16- to 24-year-olds was unemployed in May — the highest share in over a decade — with more than a million young Britons left out of work and education.

Article content

“Job security has become a bigger concern for younger people,” Kien Tan, senior retail adviser at PwC, said. “While older people have also been affected to some extent, they are more likely to have accumulated savings and to own their homes or have smaller mortgages.”

Article content

Only about a fifth of 18- to 24-year-olds considered their finances “healthy” in April, a survey by PwC found, down from almost a third at the start of the year. Those aged 55 and above reported little to no change in their financial situation.

Article content

Pensioners are the only age group whose appetite for saving has grown substantially since before the Covid pandemic. Intentions among over-65s to set money aside in the three months through June have doubled compared with 2019 levels, while remaining relatively flat among younger households, according to a Bloomberg analysis of GfK data.

Article content

In his first speech as UK prime minister, Andy Burnham pledged to “help more young people into work by changing the education system and giving them more support.”