Gen Z spending to top £26bn in 2025, report finds

Gen Z’s spending is set to drive over £26bn of retail spending in 2025, rising to almost £40bn over the next decade, according to research by RSM UK and Retail Economics. 

While this cohort’s spending power is forecast to keep climbing, it is also expected to keep prioritising saving and experiences. The survey of 1,500 Gen Z consumers found that a third – 34% – would choose to save or invest an unexpected £1k windfall than spend it, suggesting the generation is more financially prudent than often assumed. 

Research found that when they do spend, experiences outrank possessions, with about 14% of such a windfall going towards a major trip or event compared with 125 for luxury goods. 

Using cluster analysis, RSM UK and Retail Economics also identified four distinct cohorts within the age group. The largest share, described as “future flexers”, make up 43% of the generation and are pragmatic and ambitious, focused on building financial security. Around 24% are “experiential explorers”, who represent a balanced middle ground, prioritising social occasions and shared experiences. 

Meanwhile, the “trendsetters” cohort, accounting for 17%, are the most affluent and image-conscious, shaping the aspirations of the wider generation. The remaining 16%, labelled “budget loyalists”, are typically the youngest and most financially constrained, focused on stretching their spending and seeking value.

Jacqui Baker, head of retail at RSM UK, said: “Gen Z are often socially savvy, resilient and disciplined shoppers who take a pragmatic approach to spending. However, this age group isn’t sheltered from current cost pressures, so saving for the future ultimately comes first. This chimes with the bigger picture, with the household saving ratio increasing to 10.7% in Q2 2025, showing consumers are taking a more cautious approach across the board.

“Our findings challenge the common assumption that Gen Z only lives for the moment. Instead, Gen Z are far from reckless and have a strong instinct to plan ahead, while prioritising experiences and social occasions. With many still living at home or renting, it’s likely that getting on the property ladder is a priority, so if they’re to part ways with their money, the purchase must align with their priorities and deliver long-term value.”

Richard Lim, chief executive at Retail Economics, added: “Gen Z are diverse, and their behaviours, expectations and purchasing decisions vary widely, so taking a ‘one size fits all’ approach will fail. Gen Z already represents a significant share of retail spending, and their influence is only set to grow as incomes rise, so recognising the differences within this generation is key to staying relevant in the future.”