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24 Sept 2022

Young adults ‘downsizing’ lifestyles as living costs rise

Young adults ‘downsizing’ lifestyles as living costs rise

Young adults are more likely than over-55s to report “downsizing” their lifestyle or spending to deal with the cost-of-living crisis, research suggests.

Around one in five (20.2%) under-35s are doing this, compared with 14.5% of over-55s, the survey of 2,000 people across the UK in September found.

Young adults are also around twice as likely as over-55s to say they are using credit cards to help get them through the cost-of-living crisis and that they feel stressed about budgeting.

Around one in seven (14.8%) under-35s said they are using credit cards to help, compared with around one in 14 (7.2%) over-55s, according to the research from Starling Bank.

Nearly half (45.2%) of under-35s feel anxious or stressed about budgeting, compared with approaching a quarter (22.9%) of over-55s.

More than a quarter of young adults (27%) are putting major purchases such as a car or home renovations on hold and a similar proportion (26%) are postponing holidays, the survey found.

While most people are being impacted by the cost-of-living crisis, the findings suggest that it is more acute for younger people. Among those respondents who regularly set a personal budget, they typically go over by £92 a month, compared with £108 for those under 35 and £64 for the over 55s.

Starling Bank has launched a free budget planner online tool, to help people identify and understand their monthly outgoings.

Helen Bierton, chief banking officer at Starling Bank said: “The cost-of-living crisis is forcing us all to look at our personal and household finances more closely, and it’s clear that young adults are trying to cushion themselves by taking a proactive approach to money management through the sacrifices and financial choices they are making.

“Yet when it comes to budgeting, our research tells us that it’s the missing detail in everyday spending that often results in unexpected costs that are more difficult to plan for.

“We’ve created a tool that can help identify all outgoings to avoid expenses like loved ones birthdays or insurance renewals coming in as an unpleasant surprise.”

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