The 'rock and roll' lifestyle of many young Britons is having a detrimental effect on their financial health, with most young people spending more on cigarettes and alcohol then they put aside in savings each month, according to new research from Birmingham Midshires.

At a time when the UK faces a potential pensions crisis and many financial providers are reporting a slump in savings levels, the analysis of consumer spending patterns reveals how the 'live for today' mentality of many young Britons could hit them and Britain's economy hard in the future.

According to Birmingham Midshires, 66 per cent of people aged 16-24 will spend an average of £52.03 on alcohol this month and over one in three (35%) will spend an average of £17.73 on cigarettes. This compares to only 31% who claim they will save this month - with the average savings level standing at just £46.87.

The research is the first in a series of consumer findings to be issued by Birmingham Midshires as part of its new 'Saving Britain 2002' Campaign, which aims to boost public confidence in savings and investments and help Britons manage their money better in 2002. Birmingham Midshires asked representative sample of 1,000 people how much they would be spending on a range of items during the following month. Key findings include:

Alcohol: The financial outlook might not look good for young people but the for pub landlords the future could be rosy. 66% of young people will be spending money on alcohol in the next month, more than any other item. The average young person spends an alarming £52.03 on booze each month, compared to a national average of £28.03.

Cigarettes: Smoking can damage your finances as well as your health. One in three (33%) of 16 to 24 year old regularly buy cigarettes, spending an average £17.73 a month. The biggest smokers are the 35 to 34 year olds with 43% spending an average £29.15 compared to the national average of £18.00.

Savings: In the face of recent economic uncertainty, more than one in two Britons (53%)say they will not save anything this month.. Of those that do, Britons put aside an average of £56.46 a month, men are more prudent then women saving an average of £72.38 each month compared to women saving £33.49.

Fast Food Britain: To make matters worse, Britons are also spending large amounts onf cash on fast food. People aged 16 to 24 are spending an average £19.58 on fast food, burgers and kebabs, yet It is the thirtysomethings that really like a take-away with 25 to 34 year olds spending an average £22.99 compared with a national figure of £15.16.

Talking the talk: Staying in touch and gossip is a big part of the rock and roll lifestyle and, for young people in Britain, it also takes up a big part of their cash. A staggering, 87 per cent of 16 to 24 year olds claim they will be spending money on mobiles phones in the next month. The average spend on mobile phones for this age group will be £20.44 almost twice the national average of £11.63. Surprisingly men are the bigger talkers pending £14.49 compared to £8.90 for women.

Commuting: Overall, Britons claimed that the costs of commuting was their biggest financial outlay each month, adding to commuter frustrations after numerous delays and strikes in 2002. On average, Britons will spend £57.65 this month on travel, while commuters in the South West region, among the worst affected by strikes in recent days, have the highest commuter spend £86.59.

Tim Hague, Head of Savings and Investments at Birmingham Midshires said: "Young people are living rock and roll lifestyles, spending levels are high while savings and investment is not on their agenda. While we would not begrudge young Britons from enjoying their lives, the concern is that a savings and investment black hole is being created as young people spend money on luxury items and in pubs. What we recommend is that all people take a balanced view of their finances to ensure their security."