Gen Z boosts subscription economy, tripling spend of older generations

New research from Visa¹, reveals that Gen Z in UK (ages 13-28) 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.

Gen Z stands out as the largest consumer group for subscriptions, with 93% surveyed having at least one. 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:

• £86 on meal kits, compared to £51 for Gen X and £33 for Baby Boomers.
  
• £70 on wellbeing services (for instance meditation apps), compared to £16 for Gen X.
  
• £68 on beauty subscriptions, compared to £32 for Gen X and £34 for Baby Boomers.
  
• £57 on plant subscriptions, compared to £16 for Gen X.
  
• £53 on snack boxes, compared to £24 for Gen X and £18 for Baby Boomers.
  

The findings reveal a behavioural shift, with the younger generation willing to spend more on convenience and speed.

Despite being the biggest consumers of recurring payments, three-quarters (75%) 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 nearly a fifth (18%) experiencing failed payments for bills and 14% for subscriptions.

The survey also revealed that consumers in general face issues with their Direct Debit payments:

Nearly a quarter (23%) of UK respondents have paid for a bill or subscription they no longer wanted. This rises to a third of Gen Z (35%) respondents.

Almost one in six (16%) UK consumers, and one in four Gen Z (25%) missed a cancellation window.

Over one in ten either missed a subscription or bill payment (13%, and 22% of Gen Z) or were hit with late fees or penalties (11%, 17% of Gen Z).

These negative experiences come at a high cost, with businesses losing out as frustrated customers decide not to make purchases. For instance, one in ten consumers surveyed (11%) have opted not to make a purchase or take out a subscription due to past payment issues. Among Gen Z, this figure rises to one in five (20%), highlighting a lack of trust and financial confidence among young people.

Unsurprisingly, Gen Z is most open to trying new payment methods for bills and subscriptions (40%), showing a strong willingness and demand for innovation.

Mandy Lamb, Managing Director UK and Ireland at Visa, commented:

“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. 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.”

Visa is applying its infrastructure, technology, and capabilities to improve account-to-account (A2A) payments. Launching in the UK in 2025, Visa A2A will enable a smarter digital experience, advanced security features, and an easy-to-use dispute resolution service—improving the current pay-by-bank experience. It allows merchants to offer consumers a safer and easier way to pay recurring bills via bank transfers, helping them manage bills and subscriptions more effectively and recover their money if something goes wrong.