The younger generation is driving the subscription economy, according to Visa, with 93% of 13-28 year olds subscribing to at least one service.
New research, from the digital payment provider, revealed that Gen Z spends an average of £305 per month on subscription services. This is three times what Gen X (ages 44-59) spends (£91) and Baby Boomers (ages 61-79) who spend £108. Millennials (ages 29-44) also spend a significant amount, at £261 per month.
The most common subscriptions across all generations are for TV, music, and groceries, with Gen Z leading both in terms of consumption and spending.
Among those who sign up for each service, Gen Z is willing to spend the most per month with £86 on meal kits, compared to £51 for Gen X and £33 for Baby Boomers. Gen Z are also spending on average £70 on wellbeing services (for instance meditation apps), compared to £16 for Gen X. This cohort will shell out £68 on beauty subscriptions, compared to £32 for Gen X and £34 for Baby Boomers.
Despite being the biggest consumers of recurring payments, three-quarters of Gen Z have had a negative experience when paying for their subscriptions or bills with Direct Debit, compared to just half of the UK population. Challenges include unexpected charges, difficulty in cancelling, and poor visibility into payments, with 18% experiencing failed payments for bills and 14% for subscriptions.
“We’re seeing a clear shift in how people spend their money, which opens up huge opportunities for the subscription economy and new business models,” said Mandy Lamb, managing director UK and Ireland at Visa.
“However, taking advantage of these opportunities hinges on delivering the right customer experience. We know that customers want more control, transparency, and convenience, so businesses need access to solutions that can meet these needs.”
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