Stop Getting Gen Z Spending Habits Wrong
- Popular assumptions about young people - that we’re sober, anti-brand and broke - aren’t always backed up by evidence, which has allowed misunderstanding to flourish.
- Instead, Gen Z are complex and often contradictory, with our spending habits reflecting our unique circumstances, rather than fitting neatly into a box.
- To win with young people, brands need to engage with those realities, rather than treating Gen Z as a homogenous block.
Gen Z are usually described as digital natives, sober, sustainable, anti-brand and broke. But what if that conventional thinking was wrong? Speak to young people, and it turns out that most of these claims are either untrue or blown far out of proportion. The parts that survive contact with the data rarely mean what brands think they mean.
Start with alcohol, the one everyone is most confident about. Research from the International Wine and Spirits Record shows that Gen Z are drinking more than they were three years ago: legal-drinking-age participation in the UK has risen to 76%, up from 66%, with the Autumn 2025 wave hitting 79%. The generation that was supposed to have quit drinking is drinking more than it was when the headlines about them quitting were written.
What the sobriety narrative gets wrong is not the existence of non-drinkers, but their reasons. Oscar, 19, from London listed off why anyone in his group turns down a drink: one is Muslim, another races motorbikes professionally, another is training to be a pro cyclist, and himself, because he prioritises the gym and only ever sticks to one or two drinks on a night out. Religion, occupational necessity, and a training schedule: none of these is part of a wellness trend, or suggest that “not drinking” is an identity in itself. Brands which design campaigns around these flawed assumptions risk overlooking the wider reality.
The other thing that gets missed is substitution. Oscar had been out the night before we spoke, to the cinema, and spent £60 without drinking. "Didn't feel like I needed to drink because we barked it," he said, meaning they had smoked weed. The money went out either way.
Where that money comes from is the second thing the Gen Z caricature gets wrong. Oscar summarised the entire economic position of our generation in one sentence: "I don't feel skint, and I don't think I act skint, but I do feel skint when I look at my bank account." Both halves are supported by the numbers.
One reason that Gen Z doesn’t “feel skint” is that, contrary to assumptions, we out-earn our predecessors. The Resolution Foundation found real weekly pay at the age of 24 for those born in the late 1990s was 12% higher than for those born in the late 1980s, and that by 25 this cohort out-earns any generation born since the 1950s. UK Gen Z retail spending passed £26 billion in 2025 and is projected to reach around £40 billion within a decade, with Clearpay and Accenture putting us at 39% of UK retailer spending by 2030.
That rise tracks the minimum wage rather than career progression. Since 2012, real hourly pay has risen 36% for the lowest-paid 10% of UK workers. In 2025 alone, the National Living Wage for 18-20 year-olds went up 16.3%, from £8.60 to £10.00 an hour, worth around £2,500 a year to someone working full time. While wage stagnation is a real issue across the UK workforce more generally, younger workers have been insulated from some of those pressures: the floor has been rising faster than the middle, with Gen Z disproportionately standing on the former.
There are caveats, though. The youngest of us, born from 2001 onwards, look to be on a lower trajectory. Minimum wage rises can't be relied on to continue, and the NEET crisis of around a million 16-24-year-olds casts an ominous shadow over everything. Living arrangements also play a key role: 63% of 20-24 year-olds still live in the family home, up 12 percentage points since 2011. This might be limiting for many of us, but it also frees up discretionary income for experiences and small luxuries. Someone paying no rent has more spare cash for a festival ticket than someone earning more and renting in Zone 2. A housing crisis says more about house prices than it does about our incomes.
But look at what's left once housing and living costs come out, and Oscar's point about his bank balance comes into sharper focus. Most Gen Zs have under £400 a month of disposable income, with the largest band being £100-199. A quarter feel our income isn't enough to cover living costs, let alone save, and almost a third have nothing left at all once essentials are paid for. Which is why any campaign that boxes us into either having cash or being broke will miss, because both are true simultaneously. Something can be unaffordable and irrelevant in the same breath: a deposit is unaffordable, a £5 matcha is not.
Part of the gap between feeling skint and being skint is mechanical. "Money disappears so quickly these days with Google Pay, you tap, tap, tap," Oscar said. "Maybe with real cash it would feel more real, and we wouldn't spend so frivolously." Frivolously, in his case, meant spending £250 on getting highlights in his hair. He didn't even like them.
This is despite young people being more active savers than you might guess. In a survey of 1,500 UK Gen Z, 34% said they'd save or invest a £1,000 windfall; 18-24s save an average of £195 a month, rising to £273 for 25-34s; and 76% of Gen Z opened or started using a new savings or investment product in a single quarter of 2025, against 50% of Gen X.
But "saving" is doing a lot of work in those figures. Ask what the money is actually for, and you tend to get what I got from Oscar, which is a buffer rather than a fund: "I save, [then] it goes back into my current account when I run out of money." Gen Z might be putting money in their savings every month, but on a much shorter cycle than previous generations, ensuring that their long-term goals remain unfunded and out of reach. "If it didn't go back into my current account, I would save to open a bar,” Oscar said. “I want a proper business that's physical because I think that's cool."
If Gen Z’s drinking, earning and saving habits are misunderstood, then so is our approach to spending. We tell surveys we prioritise sustainability, but we’re also driving the growth of Shein and Temu. Vinted is now the UK's third-largest fashion brand by customer numbers, behind Primark and Next, part of a second-hand sector which made up over 10% of UK fashion spending in January 2026. This sounds like an ethical shift, until you notice that Vinted has started marketing resale on cost rather than sustainability. They can presumably see what's moving the units.
"I think most people use Vinted to save money, or to buy cheap clothes, rather than the sustainability aspect," Oscar said. He’s never bought from Shein or Temu, but not on principle: everything there is "one-wear type clothing that's not made to last." He avoids synthetics, and volunteered the flaw in his own position before I could point it out. "I don't like buying fabrics made out of oil; I like natural things like cashmere or cotton, though those aren't strictly sustainable either." What he does respond to strongly is durability. The brand he'd defend is Intimissimi, on the grounds that they make "very nice blank t-shirts" and he still wears his dad's, which are twenty years old.
Oscar’s approach to his wardrobe reflects the fourth key misconception about Gen Z: that we’re a single, homogenous bloc. A 13-year-old is choosing between V-Bucks and what to get at the corner shop. A 27-year-old is choosing between a pension contribution and a festival ticket. RSM splits us four ways: future flexers at 43%, who are pragmatic and building financial security; experiential explorers at 24%, sociable and experience-first; trendsetters at 17%, the most affluent and image-conscious Gen Z subgroup; and budget loyalists at 16%, the youngest and most constrained.
By age, Oscar should be a budget loyalist. He isn't. Asked what he'd do with £1,000 tomorrow, he said he'd "blow it all on clothes; I would go to DSM and use my friend's staff discount." Recent purchases included a Uniqlo jumper, trousers and a shirt from Zara because he had to look fancy, a Junya Watanabe jumper, and a pair of Axel Arigato shoes. That is a trendsetter sitting squarely inside a budget loyalist's demographic bracket, which is exactly why targeting by age band fails. If your brief doesn't understand and explain which of these four demographics within Gen Z it's for, it's for none of them.
It's also why loud budgeting reads so differently depending on who's doing it. Dupes are back, worn as a badge of savviness rather than hidden out of shame: for my birthday I asked my mum for a fake Burberry scarf. Nobody who finds the dupe gets judged. And we spend on small luxuries, a £5 matcha, a pastry, a lipstick, because we'd rather have frequent small hits than one expensive one.
Gen Z’s spending sits outside pre-existing assumptions, but it’s also moved off the channels brands still instinctively buy into first. Adobe found that 64% of Gen Z use TikTok as a search engine, and 47% of younger shoppers used TikTok Shop to browse or buy in the past three months, against 21% of shoppers overall. In practice, it's a sequence rather than a single platform. Oscar starts on Pinterest when he's actively looking for clothes, sees things passively on TikTok and Instagram, then goes to Reddit "to see if things are any good" before he buys. Creators outrank advertising, and de-influencing is in.
Loyalty has gone the same way. 45% of us are more likely to trust a product if it goes viral, nearly half will drop a brand for being boring, and 47% think a brand advertising around an unrelated cause is a sales ploy. Hardly anybody under 28 has ever felt loyal to a points scheme. Being dropped is easy: Oscar has walked away from trend-led labels like Bad Friend Jeans, Judah Tribe, Clint's, because they aren't timeless, and couldn't say whether that's a cultural shift or just him growing up.
Being actively resented is easier still: just borrow from a culture you don't understand. Oscar described a train company that ran a parody advert of So Solid’s UK Garage hit 21 seconds. "It was really sad. I listened to the ad, and they just ruined a song. It just made me sad. If you don't get a culture, don't try and market to them unless you can do it sensitively. If something's forced, I find it annoying." He had a theory about where that comes from, too: "I think there's a level of dissonance. Brands get older people to try and execute something for our age group, but it doesn't work in the way it should."
So: be findable in social search rather than just Google, and assume Reddit is the last stop before checkout. Explain your price instead of asserting it, because if you can't tell us why you're better than the dupe, we'll assume you aren't. Sell durability rather than virtue, since one of them converts and the other only polls well. Pick which of the four cohorts you're talking to and stop treating an age bracket as a segment. Get into resale and price it on cost. And stop building drinks strategy around a sobriety that isn't happening.
Gen Z have been simplified, but calling us complicated instead is just a more flattering simplification. What the caricature actually gets wrong is its shape. It describes a bloc that doesn't drink, can't afford anything, and shops on principle, when the truth is a nineteen-year-old who spends £60 on a night out without touching a drink, £250 on highlights he doesn't like, and nothing at all on Shein because the seams go. Individual, inconsistent and hard to read, the same as every other generation.
Oscar put the warning better than I can: "I think we all think we're more complicated than we are. We confuse our fluff with intelligence." The work for brands is speaking to us, learning the language, and understanding what the world looks like through our eyes.