Gen Z Rewrites Holiday Giving Prioritizing Savings and Experiences Over Spending

As the festive season approaches, new research suggests that Generation Z is redefining traditional gifting habits, signaling a clear shift towards financial prudence. Far from being extravagant spenders, Gen Zers are demonstrating a strong inclination towards saving and investing. Findings from RSM UK and Retail Economics, based on a survey of 1,500 Gen Z consumers (up to 28 years old), reveal that a significant 34% would choose to "save or invest" an unexpected £1,000 windfall rather than spend it. For those who do opt to spend, experiences are consistently prioritized over luxury goods, indicating a preference for memorable moments over material possessions.

This forward-thinking approach underscores a generation "planning for the future and less reckless with their cash." When faced with a hypothetical windfall, approximately 14% of Gen Z consumers would allocate it towards a major trip or event, firmly placing "experiences" ahead of "luxury goods," which would attract around 12% of the spending. This prioritization highlights a fundamental value system that emphasizes long-term financial security and meaningful life experiences, rather than immediate gratification through high-end purchases.

However, understanding Gen Z requires acknowledging its inherent complexity; it is far from a monolithic group. The research identifies four distinct segments, each with unique financial behaviors and priorities. "Future Flexers" constitute the largest group at 43%, characterized by their pragmatic and ambitious nature, with a primary focus on building financial security. "Experiential Explorers" (24%) represent a balanced segment, sociable and moderate, who prioritize social occasions and enriching experiences. "Trendsetters" (17%) are the most affluent, highly image-conscious, and socially connected cohort, whose purchasing decisions often influence wider Gen Z trends. Lastly, "Budget Loyalists" (16%) are typically the youngest and most financially constrained, distinguished by their practical and value-driven approach, always aiming to maximize every pound spent.

Jacqui Baker, head of Retail at RSM UK, sheds further light on these dynamics, stating, "Gen Z are often socially savvy, resilient and disciplined shoppers who take a pragmatic approach to spending." She emphasizes that despite their savvy nature, this age group is not immune to prevailing cost pressures, which reinforces their commitment to saving for the future. This cautious behavior aligns with a broader economic trend, as evidenced by the household saving ratio increasing to 10.7% in Q2 2025, suggesting a more cautious consumer approach across the board.

Despite their prudent spending habits, Gen Z is poised to become a formidable "spending powerhouse." Retail Economics projects that this generation will drive over £26 billion in retail spending by 2025, a figure expected to rise to almost £40 billion over the next decade. This forecast underscores the growing influence and substantial spending power of this trendsetting demographic. To effectively engage with this crucial consumer group, Baker advises retailers to prioritize winning their trust and fostering loyalty through a commitment to relevance, authenticity, and innovation, ensuring their offerings resonate with Gen Z's evolving values and expectations.