A significant number of 18- to 34-year-olds are having to alter major life plans because of their financial circumstances, with more than one in two (56%) either delaying or cancelling significant events or considering doing so, new insights from St. James’s Place (SJP) reveal.
SJP’s Financial Health research – assessing the UK’s wealth and financial wellbeing levels – finds that to navigate the current economic climate, one in ten (10%) 18- to 34-year-olds are renting for longer than planned, while 8% are changing plans to move house. Others are rethinking family plans, with 8% altering plans to have a child or more children. Meanwhile 9% are changing, delaying or even cancelling their wedding plans and 3% are even putting off getting divorced.
Many 18- to 34-year-olds are also re-assessing their career and education ambitions, with 16% having changed or considering changing their job or career, 8% rethinking further education, and 6% shifting plans to set up their own business.
Feeling the financial strain
Younger generations have felt the financial pinch over the last 12 months, with more than a quarter (26%) reporting their financial situation has worsened in this period. The main reasons for this include the general rise in the cost of living (51%), salaries not increasing or increasing enough (34%), and rental (15%) or mortgage (11%) payments increasing.
One in ten (11%) have also paid for a major life milestone such as a wedding or honeymoon in the last year, while 8% have had a child and therefore had to fund additional costs which has impacted their financial situation.
Taking action to tackle personal finances
SJP’s research finds that, with many 18- to 34-year-olds trying to navigate the economic climate, positively, they are proactively taking action to improve their finances amid this backdrop. In the last six months alone, more than half (55%) have reviewed their outgoings, 47% have checked to see if they could make savings on households bills and 45% have explored if they could get a better rate on savings. Almost one in three (31%) have checked they are making the most of tax allowances and reliefs, and 24% have looked into whether they are claiming all the childcare vouchers they’re entitled to.
Alexandra Loydon, Group Advice Director at St. James’s Place, comments: “Your twenties and thirties can be hugely exciting years, with many people hitting major life milestones such as getting on the property ladder, settling into relationships, and starting a family during this period. These moments naturally come with additional financial costs, which can be a struggle to meet, particularly in the current climate.
“Many 18- to 34-year-olds who are now rethinking – or perhaps have been forced to rethink – some of their major plans, will likely feel overwhelmed and possibly frustrated by this. It’s therefore important that they get a sense of their finances, explore their options, and build a realistic plan to help achieve their goals, so they ideally don’t have to cancel or delay them.
“It’s positive to see that so many young people are taking proactive steps to improve their personal finances. Simple actions such as making a budget, and maximising savings rates and tax allowances can help you take control and ensure you’re making the most of your money. This can set you up for a more positive future, and hopefully mean that major life moments can proceed as planned.”
