A new financial trend is taking hold among younger Britons, challenging the long-held belief that building a nest egg requires drastic lifestyle cuts. Known as 'soft saving', this approach prioritises flexibility and mental wellbeing over rigid monthly targets, allowing a generation to save for the future without ditching their morning coffee or avocado toast.
What is Soft Saving and Why is it Gaining Traction?
The concept emerges as research from the savings nudge app Marygold & Co reveals a generation with fluid financial lives. Their study found that 38% of Generation Z (those aged 13 to 28) say their financial circumstances change every month, while 34% admit their savings goals shift just as frequently, often influenced by their emotions.
This reality makes traditional, fixed-amount saving methods feel impractical for many. With high and unpredictable inflation adding pressure, a more adaptable model is appealing. Matthew Parden, chief executive of Marygold & Co, notes: “Saving habits across the UK have become more fluid - younger earners in particular are managing money in a way that adapts to changing income, lifestyle and motivation.”
Soft saving is defined by this adaptability. It doesn't advocate reckless spending but removes the guilt associated with small pleasures. Instead, it uses technology and behavioural psychology to build savings seamlessly into daily life.
How Soft Savers Are Making It Work
The strategy relies heavily on automation and psychological tricks. Apps like Marygold & Co, Plum, and Moneybox connect to bank accounts to analyse spending. They then suggest affordable savings amounts, round up spare change from transactions, or automatically transfer small, manageable sums. As Matthew Parden puts it: “You won’t miss the 37p, but you’ll notice when it becomes £370.”
A key tactic is using 'named pots' for different goals—such as 'Holiday Fund', 'Emergency Buffer', or 'Motorbike Savings'. This creates a clear purpose and makes the progress tangible, reinforcing the saving habit. Anita Wright, a chartered financial planner at Ribble Wealth Management, explains: “Progress feels good - watching named pots grow builds a saver identity.”
Take Mikolaj Figarski, a 20-year-old from London earning around £25,000. He is a proud soft saver. Paid weekly, he moves small amounts into different pots for rent, travel, and bigger goals like a new computer. He aims to save up to £500 a month but feels free to rearrange funds when needed. “The concept works for me because it suits my lifestyle,” he told The Independent. “Getting paid weekly helps me keep the habit without feeling strict.”
The Potential Pitfalls and How to Avoid Them
While convenient, financial experts warn that the 'set and forget' nature of soft saving can breed complacency. Eamonn Prendergast, a chartered financial adviser at Palantir Financial Planning, cautions: “If you ‘set and forget’ without reviewing what you’re actually building towards, you risk saving too softly and too slowly.”
The consensus is that automation should be paired with regular check-ins. Anita Wright highlights specific risks: “Automation can backfire if your income fluctuates... A £50 round-up won’t fund a £1,500 emergency.” She advises using percentage-based round-ups instead of fixed amounts and reviewing each savings pot quarterly to ensure alignment with real-world goals.
To boost their soft savings, many young people are turning to side hustles like online selling or pet sitting. They are also using cashback websites and discount apps to reduce spending without cutting back on enjoyment, making every pound work harder.
Ultimately, soft saving represents a generational shift in personal finance. It acknowledges that financial wellbeing is intertwined with mental wellbeing, offering a pragmatic path to security for those navigating an uncertain economic landscape. The best approach, as experts conclude, is balanced: use technology to build discipline, but remain the pilot of your own financial journey.
