While conversations lean towards the benefits of savings, it should also spark considerations around why many people cannot build the financial resilience they need.
 
At Lantern, we support thousands of people every year on their journey out of debt and see first-hand how financial pressures can affect those already struggling. One issue which comes up time and time again when supporting people with problem debt is their inability to create a financial buffer for themselves, often through no fault of their own.
 
The data is alarming
 
Limited or no savings traditionally impacts younger generations most and the numbers present a stark picture when it comes to their financial circumstances.
 
Research commissioned by StepChange last year found almost one in four (23%) 18-24-year-olds are in some form of financial difficulty. This equates to approximately 1.3 million young adults across the UK.
 
Rising rents, soaring energy bills, and stubbornly high inflation rates are swallowing already stretched incomes, leaving little room to save, let alone pay down existing borrowing. For many, even modest savings ambitions feel out of reach, meaning that when an unexpected expense arises, they are forced to rely on credit again.
 
Meanwhile, quick access to credit plans such as ‘pay in three’ or ‘buy now pay later’ schemes often exacerbate debt issues, despite being positioned as easy-to-manage lending. This creates a cycle that is difficult to break and risks trapping a generation in long-term financial insecurity.
 
Why savings are so vital
 
Having a financial buffer can significantly reduce a person’s need to borrow funds and a small savings cushion can mean the difference between coping with an unexpected bill and falling into problem debt.
 
Households with savings, even if it’s just a couple of hundred pounds, are less likely to borrow when unexpected costs arise. Whether it is extra parts needed during a car’s MOT, covering a broken-down boiler, or fixing a burst pipe, having a small savings pot can alleviate some of the financial burden, even if it won’t cover all of it.
 
It creates a safety net, reduces stress, and allows for greater control over finances. Starting doesn’t have to be complicated either. Setting aside a few pounds each week, automating transfers to a separate savings account, or rounding up everyday purchases can all make a difference over time.
 
Crucially though, building savings isn’t just a practical challenge, it’s an emotional one too. The stigma around debt can make people, particularly young adults, feel ashamed or judged for struggling financially. That shame can make it harder to prioritise saving, even when they understand its importance.
 
Modern banking solutions will lead the way
 
Younger generations are not ignoring the problem, they are demanding better tools to manage it. We know that Gen Z and Millennials want flexible, digital solutions that let them manage debt and savings side by side.
 
They are pragmatic too and want repayment plans that are sustainable, transparent, and allow them to start building resilience at the same time. As well as modern accessibility options which allow them to manage their finances in real-time.
 
In 2025, people want tools fit for a modern age to build foundations which will keep them from falling back into debt ever again. Easier access to tools which help consumers manage their money will encourage them to do exactly that, enabling them to stay on top of their finances.
 
This is an opportunity we must seize, and it can stem from collaboration across all stakeholders. The debt management sector, lenders, and policymakers must design solutions that support repayment and savings in tandem, using technology to make it effortless.
 
Removing taboos around debt
 
In this country, personal debt is still a taboo topic, which has negative implications on wider conversations around money. We must also remove this stigma to encourage honesty around money management and savings. Tackling debt and saving money are not mutually exclusive, they can be achieved simultaneously with the right approach.
 
Too many people still see debt as a personal failing and put off asking for help until they are in crisis. But at Lantern, we know that early intervention and an ethical, compassionate approach can transform outcomes.
 
As we recognise UK Savings Week, we should note that savings are not just a ‘nice to have’, they are an essential part of futureproofing individuals, families, and communities from the pressures of unmanageable financial pressures.
 
Debt is not just a financial issue; it’s a societal one. By helping people to build even a small buffer while paying down what they owe, we can strengthen financial resilience across the country and give people the confidence to plan ahead.