Thrift is dead, long live hedonism. That is the attitude being adopted by an increasing number of millennials who believe no amount of scrimping and saving will improve their bleak financial prospects, according to new research released this week.

The survey, commissioned by the wealth manager Investec, found that more than a third of young people want to enjoy themselves rather than put money away for a rainy day. This is in stark contrast to the more frugal mentality of the baby-boomer generation, only a fifth of whom said they prefer to spend rather than save.

The research highlights other major differences between the two generations: more than a quarter of millennials believe there is no point in investing for the future due to ‘unavoidable’ debt like tuition fees, compared to just five per cent of over-55s, who benefitted from free university education.

The vast majority of young people (88 per cent) believe the steep cost of living has made saving much harder compared to times gone by and two-thirds of over-55s agree with that view. However, half of millennials are also falling victim to what Investec calls a “buy now, pay later” culture.

Chris Aitken, head of financial planning at Investec, said: “The culture of thrift has declined in recent years among young people because they have become more reliant on debt to finance their lifestyles.

“University fees mean that debt is part and parcel of many young peoples’ lives long before they contemplate taking on a mortgage.”

Separate research recently conducted by Aviva also found that around half of millennials treat themselves as and when they want and spend their savings on things they want but don’t need.

Professor Darren Dexbury, an expert in behavioural finance at Newcastle University, said: “We know that emotions influence financial decisions, especially regret, a negative emotion related to responsibility.

“Older individuals have been shown to suffer less from negative emotions and to exert greater emotional control than younger individuals.

“By choosing to ignore their finances, perhaps Generation Y hopes to avoid responsibility, and associated feelings of regret, if things go wrong.”

He also suggested that the rise of cashless spending on contactless cards has distorted young people’s perceptions of how much money they spend.

“As well as economic value, money also has social and psychological value,” he said.

“When we pay for goods and services by contactless card, we may be conscious of the economic value of money that we are exchanging, but the social and psychological value are not as salient to us.”

A more careful approach to shopping, however, might not be enough to solve the huge financial problems now facing Generation Y.

A report published last month by the Institute of Fiscal Studies found that those born in the early 1980s were the first post-war cohort not to enjoy higher incomes in early adulthood than those born in the previous decade.

Andrew Hood, co-author of the report and a research economist at IFS, said: “Sharp falls in home-ownership rates and in access to generous company pension schemes, alongside historically low interest rates, will make it much harder for today’s young adults to build up wealth in future than it was for previous generations.”

The report also found that renters born in the early 1980s are spending nearly 30 per cent of their net income on housing costs compared to just 15 per cent for homeowners. This is a huge change from the 1960s, when both homeowners and renters of the same age spent about 20 per cent of their income on housing costs.

Moreover, the situation facing renters could actually deteriorate rather than improve with the introduction of tougher taxation for landlords, who may be forced to raise rents.

Stuart Donaldson, SNP MP for West Aberdeenshire and Kincardine, said cutting tax relief for buy-to-let from 40-45 per cent to 20 per cent, would have “adverse consequences” for the availability of affordable housing in Scotland.

“I am very mindful of the worrying possibility of landlords being forced to either drastically increase rental costs or to sell properties,” he said.

That said, the SNP administration in Holyrood has itself come under fire for failing to build enough homes.

It published statistics last month showing the number of new homes built in Scotland had fallen by two per cent over 2015-16, with planning permission for new developments also slowing down over 2015.

Karen Campbell, director of policy at industry body Homes for Scotland, said: “The simple fact is that whilst Scotland's population has increased to its highest ever level, the supply of housing continues to lag ever further behind.

“We want to see a return to pre-recession levels of building around 25,000 new homes a year by the end of this parliament, which requires a year-on-year increase of at least ten per cent.”