Nearly 70 per cent of generation Z also said they were trying to save more this year, compared to 56 per cent of millennials, 43 per cent of generation X and 36 per cent of boomers. (Credit: Getty Images)
Younger Canadians face some formidable financial obstacles, from inflation to high housing costs, but recent research shows many of them are taking initiative with their savings.
Generation Z workers save an average of 11 per cent of each paycheque, more than any other generation, according to the latest survey of working Canadians from the National Payroll Institute, analyzed by Canada’s Financial Wellness Lab, based at Western University.
Generation X and boomers saved an average eight per cent and millennials an average nine per cent of each paycheque.
Nearly 70 per cent of generation Z also said they were trying to save more this year, compared to 56 per cent of millennials, 43 per cent of generation X and 36 per cent of boomers.
Peter Tzanetakis, president and chief executive of the National Payroll Institute, said the survey places respondents into one of three categories — financially stressed, financially stable and financially comfortable — based on their spending habits, debt management and savings.
The higher savings have been a “tipping point,” pushing more younger Canadians into the “financially comfortable” category, Tzanetakis said.
Nearly a third of generation Z respondents were considered financially comfortable, surpassing both millennials and generation X, in the survey.
He said the younger generation’s higher savings rate is likely tied to their spending a smaller proportion of their income on housing. While 44 per cent of both generation X and millennial respondents spent over 40 per cent of their monthly income on housing, only 35 per cent of generation Z reported the same.
“I think the dream of home ownership may be fading for gen Z,” said Tzanetakis, noting only a quarter of younger respondents said they felt confident about affording a home in their desired area within the next five years.
The latest data from Statistics Canada shows the youngest households (under the age of 35) are the only age group that has continuously reduced their mortgage debt since 2022, due to rising housing costs and interest rates pushing homeownership out of reach.
And while some younger Canadians are opting to rent, others are living at home with their parents longer to save money, said Alim Dhanji, a certified financial planner at Assante Financial Management Ltd., based in Vancouver.
Dhanki said younger Canadians are also more motivated to save and look after their finances, especially after learning from the experiences of past generations amid periods of economic uncertainty.
He’s seen younger Canadians actively look for ways to cut down on costs, like taking public transportation instead of purchasing a car. He also thinks they’re more aware of the importance of emergency savings and paying down their debts.
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Dhanji said financial information and tools are more accessible now, like budgeting apps and financial seminars, which many younger Canadians are taking advantage of as well.
He speaks to graduating students at the University of British Columbia about financial planning and says generation Z’s “ace” is time. Many of them are starting their financial planning early on, which means they can benefit from the power of compounding interest.
That’s not to say young Canadians as a whole are in a position to build a strong savings cushion. The National Payroll Institute surveys working Canadians only — meaning those who are unemployed aren’t represented in the results.
A September report from Desjardins Group said the youth unemployment rate (for those aged 15 to 24) has hit levels more commonly seen during a recession, climbing to 14 per cent in mid-2025. This may also have lingering effects on earnings over their lifetimes, Desjardins researchers wrote.
And the National Payroll Institute survey found 29 per cent of generation Z workers were living paycheque to paycheque, equivalent to millennials and greater than the proportion of older generations who reported the same.
Still, the survey found Canadian workers of all ages were faring better financially than they used to. In fact, the proportion of financially stressed workers declined from 41 per cent in 2024 to 36 per cent in 2025, after four consecutive years of growth.
Tzanetakis attributed this to the overall jump in savings, as over half of all survey respondents reported trying to save more this year (compared to 42 per cent in 2024, who said they were trying to save more).
“Canadians are preparing for future challenges resulting from the rising cost of living and potentially the impacts of tariffs on the economy and even job security,” he said.