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Three in four young adults putting lives ‘on hold’ in cost of living crisis

23rd September 2022

  • Younger generations twice as likely than over 55s to be stressed about budgets or rely on credit to navigate the cost of living crisis

  • Most under 35s have delayed major financial milestones, including moving house, starting a family or booking holidays

  • Typical household budget running at deficit of £1,100 a year (£92/month), but younger people struggling more

  • Starling launches Budget Planner for better money management

Wednesday 21st September 2022: Three quarters of young adults (76%) plan to make major sacrifices or put life events on hold due to the cost of living crisis, according to a survey by Starling Bank.

The research, which questioned 2,000 UK adults, compared age groups and asked about stresses relating to household budgets and actions being taken to mitigate rising costs. The degree to which young people are being put under strain highlights some stark differences between the generations.

Those under 35 are twice as likely to be anxious about budgets or be relying on credit to help with the cost of living than their older counterparts (55+). They’re also significantly more likely to be cutting back on spending and around one in three (33%) are checking their bank balances daily.

Actions and feelings about the cost of livingUnder 35Over 55
Using credit cards to help during cost of living crisis14.8%7.2%
Downsizing lifestyle / spending to help during the cost of living crisis20.2%14.5%
Anxious or stressed about budgeting45.2%22.9%

Such lifestyle ‘downsizing’ isn’t just day to day spending but major life events too. More than a quarter of young adults (27%) are deferring major purchases like a car or home renovation, a similar number (26%) are postponing holidays, 17% say they’re holding off buying a house and one in eight (12%) are even putting off starting a family.

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

Though the vast majority of young people (77%) do set budgets and try to stick to them, it often brings up negative feelings such as anxiety (45%), annoyance (18%), fear (20%), hopelessness (14%) and confusion (11%).

It’s also common to forget to budget for certain items, with typical ‘unplanned’ expenses being birthdays and special occasions (39%), insurance renewals or cash for emergencies according to the research (30%). This means that even extreme budgeting tactics such as ‘cash stuffing’ (taking out money and assigning it to specific spending) - which one in 20 people do (5%) - won’t help if there are unexpected costs around the corner.

To address some of the problems people experience when it comes to budgeting, Starling Bank has today launched a Budget Planner to help users feel more in control of their money and plan ahead. The online tool is available to everyone, and captures spending across essential bills as well as unpredictable expenses such as at Christmas and special occasions. It’s free, easy to use, and designed to provide a detailed breakdown of monthly outgoings so users can identify exactly where all of their income is going and whether they can make any adjustments.

Helen Bierton, Chief Banking Officer at Starling Bank comments: “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.”

Notes to editors

(1)Starling Bank commissioned an omnibus research study of 2,000 UK adults between 2nd - 6th September 2022. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles.

About Starling Bank

Starling Bank is an award-winning, fully-licensed and regulated bank built to give people a fairer, smarter and more human alternative to the banks of the past. It offers personal, business, joint, euro and dollar current accounts alongside a children’s card. Starling also provides a Software-as-a-Service (SaaS) proposition through its subsidiary Engine, using the proprietary technology platform that it uses to power its own bank. The Starling Marketplace offers customers in-app access to a selection of third party financial services. Headquartered in London, the bank has offices in Southampton and Cardiff.

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