- 44% of 40-59 year olds have directly changed their financial behaviour as a result of the last recession
- A fifth (17%) of this demographic are much more cautious about overall spending patterns
- 12% have increased their emerging cash savings and 10% have invested in a cash ISA
- After taking these actions, a tenth (9%) feel more financially stable this year
Three fifths (63%) of those aged 40-59 say they feel more equipped for this recession after having to reassess their financial behaviour following the global financial crash, and subsequent recession, in 2008. According to new research from Killik & Co, 44% directly changed their financial behaviour as a result of the last recession.
As 40-59 year olds have lived through both recessions as adults they have taken the time to reflect on how their financial behaviour has changed over the last 13 years. Within this age group it is those aged 40-44 – who would have been entering their thirties during the last recession – who have made the most changes, with 62% agreeing their financial behaviour has changed.
When thinking about how they’ve altered their financial behaviour after the experience of the 2008 recession, a fifth (17%) of the sandwich generation said they are much more cautious about overall spending patterns. 12% have increased their emergency cash savings and a tenth (10%) have invested in a cash ISA. A tenth (9%) also looked to the future and paid more into their pension while 7% started investing for their children.
A large percentage of this age group (40-59 year olds) have children (67%) to take into account when financially planning. As they lived through two financial recessions as adults, it was seen that those who are parents are more likely than the average UK adult to have changed how they treat their finances due to the last recession (48% vs 44%).
After taking action triggered by the events of 2008, almost a tenth (9%) of 40-59 year olds feel more financially stable this year due to the change in their behaviours. On the other hand, half (56%) of the sandwich generation say they didn’t change their financial behaviour after the last recession.
Svenja Keller, head of wealth planning at Killik & Co., said: “It’s really interesting to see that those who were close to 30 at the time of the ’08 recession feel that this experience has helped to shape their financial management and preparedness overall. That stage of life – as you settle into working life and work towards maximum earning potential – is a fantastic time to lay down healthy financial habits that will stand you in good stead.
“The steps mentioned in this survey, such as being more cautious of spending and investing more in cash ISAs, are smart of course. Ensuring you have sufficient cash for rainy days is vital and I would say the most important thing everyone should do. However, as we sit on the precipice of a double-dip recession, it can be tempting to focus only on the immediate future and lose sight of the importance of planning for the longer term – thinking about how you can keep putting money aside for retirement, for children, maybe even for helping to take care of the older generation. This is where financial planning, at every stage of life, can be so beneficial as it helps clients to look at their finances from every angle.”