Gen Z retirement: Using side-hustle earnings to save

2 Oct 2025

First seen in Money Marketing

Gen Z are a generation of entrepreneurs. Nearly half (45%) of those born between 1997 and 2012 have a side hustle, and more than a third (37%) have more than one, according to research by Visa. To supplement their income, young people are turning to e-commerce, social media and passion-based projects in droves, and they are doing so successfully. I, myself, am Gen Z and though I do not have a side hustle, I have had countless conversations with my contemporaries about potential side-hustles, or those set-up by acquaintances.

Difficult financial environment makes retirement saving tough for Gen Z

I’ve written before about how young people are contending with a tricky financial environment, amid rising rents and house prices, a growing cost of living and hefty student loans, so it’s no surprise that this generation has found innovative ways to make more cash. Gen Z are also ambitious about entrepreneurship, with a massive 92% of under 34s intending to transition their side hustles into full-time businesses, according to Sage research.

Gen Z’s resiliency in the face of a tough environment should be applauded. In addition to finding ways to better their lives today, their resourceful thinking means young people could be developing positive financial habits to last a lifetime. This generation are goal-oriented and financially focused, leaving them ripe and ready to create long-term savings that could set them up for a prosperous future.

Side hustle earnings to fund retirement

One of the most efficient methods to save for later in life is via a pension. For Gen Z, the cash earned by their side hustle could clear some financial headroom to increase their pension contributions, either by directly saving into a personal pension using the additional cash from their business or using their side hustle money to pay for day-to-day expenses, allowing them to contribute more to their workplace pension from their day job.

The problem, however, is that this might feel a difficult sell to a generation already contending with an uncertain financial environment. When the now is tough to navigate, putting plans in place for a distant future can feel like a low priority. I can attest to this, as the battle for increasing my workplace pension contributions was lost for several years against saving for a house, driving lessons and navigating a cost of living crisis.

Finfluencers & saving tools: engaging Gen Z

Pensions also have a bit of an image problem; young generations may watch ‘finfluencers’ on social media, many of whom talk about investing money to attempt to make a quick return compared to the traditional narrative that pensions are a tax-efficient method of saving that will see investments compound over the course of many years. Pensions are not as attractive to promote via social media, as they do not attract the same level of engagement and do not give the same dopamine hit as a quick-return narrative. This can be seen in their later life saving habits, with nearly half (48%) saying they struggle to save into a pension, according to Phoenix Group.

The question then becomes about how to engage my generation, and particularly those making extra income, with retirement savings. Gen Z are digitally native, and therefore expect interacting with pension savings to be as simple and intuitive as their best banking app. The pensions dashboard ecosystem, which is due to go live for most pension schemes towards the end of 2026 and will help savers see all their pension information in one place, could provide an opportunity to connect with this generation on their retirement. Perhaps an inbuilt tool or prompt of some kind could ask savers directly whether they have a side hustle, and if so, if they have considered putting a percentage of their extra earnings towards retirement saving, think penny saving for pensions.

The reshaping of retirement

A question remains about whether Gen Z will continue to invest time into their side gigs as they progress through their careers and lives and become wealthier and more time-poor. If earning money on the side continues to be a trend for them, it could change the shape of retirement altogether. Retirement could be thought of less as a ‘destination’ and more as a transition from more work to less, with future generations swapping full time work for established – but not full time – side hustles. This reshaping of what retirement is presents an opportunity to engage my generation, an opportunity to maximise the importance of pensions and saving early.

Young entrepreneurs are doing well, earning an average of £218.60 per month from their chosen bonus job, according to Visa research. Despite today’s challenging economic environment, Gen Zs resilient approach to earning extra income could set them up for a financially prosperous future, if only they take a portion of their extra cash and put it aside for the long-term.

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