Consumer Spending Habits: Gen Z, Gen X and Millennials

There’s a saying that goes “if you’re trying to sell to everyone, you end up selling to no one.” This is where customer segmentation comes in for almost every business. And the best way to figure out who your customers are is to create buyer personas.

But buyer personas are typically divided into generations first. These include Gen Z, Gen X and Millennials. To better understand each of these groups and how to effectively market to them, you need to understand their spending habits.

That’s exactly what this article’s focus is on. Keep reading to learn more about UK consumer spending habits per generation and what they mean for your business.

How Spending Habits Differ Across UK Generations

Different generations are impacted by different economic events. From recessions to the cost of living crisis and the Covid-19 pandemic, they handle spending differently from one another.

This seriously influences how businesses approach them and that’s why having a clear understanding of each group’s consumer spending habits is so helpful. Let’s explore these in more detail below.

Gen Z: Digital natives and the rise of mobile payments

Gen Z were born between 1997-2012, making them today’s 13 to 28 year olds. This youthful group has very specific spending preferences as they enter the job market and start earning, possibly for the first time.

Here’s what you should know about their spending habits:

• They follow a value-driven approach, preferring spending on experiences as opposed to material goods.
• They prefer brands that align with their values, including sustainability and social responsibility.
• They are perceived as spending frivolously or making impulse purchases of items like coffee, eating out and 93% have at least one digital subscription, etc.
• They aren’t focused on homeownership just yet and are rather delaying buying a house while prioritising flexibility, experiences and investments.
• They are socially conscious, digitally savvy and have a strong desire for authenticity.
• They are not brand loyal and rather purchase based on value and ethics.
• They are less impacted by traditional advertising than other groups, and value personalised experiences in online and offline interactions.
• They rely on influencers, peer reviews and social proof for their purchasing decisions.
• They want a combination of ethics and affordability, and are embracing flexible alternatives such as Buy Now, Pay Later (BNPL).
• Growing up with smartphones, they have a mobile-first mindset and are buying from social media and 68% prefer to purchase from online channels.
• They are comfortable with mobile payments and digital wallets.

In short, Gen Z’s spending habits reflect a blend of digital convenience and conscious consumerism. This makes mobile payments and value-driven purchasing not just preferences, but integral parts of their lifestyle.

Millennials: Experience-driven buyers with high digital engagement

Next up, we have Millennials, born between 1981-1996. 

Here’s what they focus on when making purchases:

• They look for omnichannel shopping experiences coupled with affordability and environmental responsibility.
• They conduct a majority of their shopping online, using social media as a method of product discovery and engage in social shopping (or buying directly from brands’ social media accounts). In fact, 43% have indicated that they search for more affordable items online as opposed to in-store.
• They spend less on housing, cars and retirement due to their lack of financial advantage after the 2008 recession, the Covid-19 pandemic, inflation, student debt, etc.
• They primarily spend on experiences and travel, paying off debt, wellness and buying from sustainability-focused businesses; However, research shows that this group spends 65% on fashion items.
• They are less brand loyal and have a greater interest in finding the best deal.
• Financial distress means delays in starting a family or purchasing a home.
• They value ethical business practices.

Overall, Millennials combine digital fluency with a strong desire for meaningful, sustainable experiences, prioritising value, ethics and convenience as they navigate modern financial challenges.

Gen X: Value-oriented and brand-loyal consumers

And last but not least, we have Gen X. This group, born between 1965 and 1980 prefers in-store shopping, high-quality products and they are highly loyal to their favorite brands. 

This is what you need to know about them:

• This generation prefers brick-and-mortar shopping.
• Traditional advertising such as TV ads is a great way to reach them.
• They value product quality and are willing to spend more for it.
• They are highly brand-loyal.

In essence, Gen X values trust, quality and consistency, making them loyal customers who appreciate reliable brands and traditional shopping experiences.

Preferred Payment Methods by Age Group

As payment technology continues to develop, so do consumer preferences. Such preferences often vary widely by age group. From digital wallets to Buy Now, Pay Later options, each generation approaches spending in its own unique way.

Understanding these differences can help your business tailor its payment options to meet customers where they are, both online and in-store.

Online vs. in-store spending patterns

Gen Z and Millennials are leading the way in online shopping, with many preferring the convenience of mobile and social commerce. They’re more likely to discover and purchase products through social media or digital marketplaces, and value a seamless checkout process.

Meanwhile, Gen X has a strong affinity for in-store experiences, appreciating the ability to see, touch and test products before buying. While they do shop online, they still gravitate towards physical retail for trusted brands and quality assurance.

Use of credit, debit and digital wallets by generation

As true digital natives, Gen Z relies heavily on mobile payments and digital wallets such as Apple Pay, Google Pay and PayPal. Their comfort with technology makes contactless and app-based payments second nature.

Millennials, while also embracing digital wallets, still use debit cards frequently to manage spending and avoid debt.

Gen X, on the other hand, continues to favour credit cards for their rewards, security and flexibility. However, they are gradually adopting digital wallets for convenience.

Buy now, pay later and subscription preferences

Gen Z and Millennials are the most enthusiastic adopters of Buy Now, Pay Later (BNPL) services. These options allow them to budget more effectively while maintaining purchasing power for lifestyle and experience-driven spending.

Gen X uses BNPL more selectively, often for higher-value purchases where spreading costs makes practical sense. Subscriptions are another area where younger consumers dominate, particularly for digital services, streaming and curated product boxes.

However, Gen X tends to stick with practical subscriptions that offer long-term value, such as software, news, or essential services.

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How UK Businesses Can Adapt Payment Options by Audience

To stay competitive, UK businesses must align their payment methods and checkout experiences with evolving UK consumer spending habits.

Younger audiences, especially Gen Z spending habits in the UK, show a clear preference for mobile payments and digital wallets, often influenced by social media trends and convenience. Offering fast, secure payment platforms that integrate seamlessly with mobile devices is key to meeting their expectations.

For Millennials, who balance financial pressures with lifestyle goals, flexible options like credit cards, debit cards and Buy Now, Pay Later services appeal to their focus on money management and achieving long-term financial goals.

Meanwhile, Gen X spending habits lean towards trusted, traditional methods such as debit and credit cards, valuing reliability and security above novelty.

By understanding different spending habits (from compulsive spending to cautious budgeting) businesses can provide personalised payment experiences that promote better mental health and spending control.

Analysing spending habits statistics and people’s spending habits in the UK helps brands tailor offerings that resonate with each audience. Ultimately, adapting to British spending habits isn’t just about convenience. Instead, it’s about building trust and supporting smarter financial choices across generations.

Using myPOS to Support Multi-Generational Spending Behaviour

As UK spending habits evolve, businesses need flexible tools that cater to the diverse preferences of every generation. myPOS makes this possible by offering a range of solutions that align with modern consumer spending habits, from cashless convenience to fast, secure mobile transactions.

Whether your customers are Gen Z shoppers using the myPOS contactless Tap to Pay option, or Gen X buyers preferring more traditional payment terminals, myPOS enables effortless payment experiences for all.

For businesses targeting younger audiences, understanding Generation Z spending habits and Millennials spending habits is key. These groups value speed, convenience and flexibility.

myPOS supports this through instant settlements, Tap to Pay and multiple payment options. At the same time, older generations who prioritise trust and reliability benefit from secure card and in-person payments.

With myPOS, businesses can effectively adapt to people’s spending habits and meet customers where they are: online, in-store or on the go. It’s a smart solution for navigating different spending habits across age groups, bridge generational gaps, and enhance every transaction experience in today’s market.

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