Three in ten (30%) UK adults wouldn’t feel wealthy if it wasn’t for the financial support of parents or grandparents, according to new consumer research* by Flagstone.
While 44% of the youngest adult generation (Gen Z – those aged 18 to 29) is reliant on parental or grandparental support to feel wealthy, it is Millennials (those aged 30 to 45) that are most dependent: 46% of Millennials admit that feeling wealthy wouldn’t be an option if they didn’t receive financial support from parents or grandparents. These younger generations are, however, likely to have some of the lowest incomes of working age adults and the most likely of all generations to have outstanding mortgage debt.
This sentiment is heightened among those with higher incomes and larger mortgages:
- 51% of those earning over £80,000 agree with the statement
- As do 54% of those with £300,000 to £500,000 in mortgage debt.
We might earn ‘good’ incomes but we’re still financially squeezed
40% of UK adults say that, while their incomes are ‘good’, they still feel financially squeezed. The experience of financial difficulty despite earning well rises significantly among Millennials, 55% of whom share this sentiment. It is also high among Gen Z adults but falls away among older generations: Gen X (37% of those aged 46 to 61) and Baby Boomers (27% of those aged 62 to 80).
Similar to the need for financial help from family members to feel well-off, the feeling of financial squeeze rises – rather than shrinks – with the size of a person’s mortgage and income:
- While 63% of those with £200,000 to £300,000 of outstanding mortgage debt agree with the sentiment, this rises to almost four in five (79%) of those with mortgages worth £500,000 or more).
- While 50% of those who earn between £30,001 and £40,000 say they feel financially squeezed, the feeling increases sharply as incomes rise, affecting 68% of those who earn over £80,000 a year.
We’re not ‘wealthy enough’, and not sure we ever will be
Only a third of (36%) of UK people feel ‘wealthy enough’. Baby Boomers are the most likely generation to feel this way, with 44% agreeing with this statement. The enthusiasm ebbs away for young generations (36% of Gen Z and 35% of Millennials). But the generation least likely to feel wealthy enough though is Gen X: only 28% of them feel sufficiently well-off and only 18% of them feel ‘wealthy for their age’ (vs. 29% average).
This lack of optimism extends to people’s financial futures as well as the present. 56% of all UK adults say that they’re not sure they’ll ever feel wealthy in their lifetime. Again this is mostly felt by Millennials (64%) and Gen X (60%). The feeling falls to 53% among Gen Z.
Younger people project more optimism for their financial futures generally. 40% of Gen Z feel ‘wealthy for their age’ despite 65% of them believing it’s harder for their generation to build wealth than it was for previous generations. And they are less likely than Millennials and Gen X to say that they are unsure they’ll achieve a sense of wealth in their lifetime (only 53% vs 64% and 60% respectively).
Katie Horne, savings expert at Flagstone: ‘For many, life feels more expensive than ever. Items and services we used to take for granted feel unaffordable and aspirations for greater financial security can feel out of reach. It’s unsettling to see such high levels of financial discomfort among all generations. But the data puts into particularly sharp focus the financial anxieties of Millennials – the ‘squeezed middle’ – for whom the costs of family life are often still abundant, ‘forever home’ mortgages still need paying, and retirement finances need to be planned and stashed away.
‘It’s startling to see the realities of how extensively and for how long the Bank of Mum & Dad is relied upon. We’re used to hearing about how young people are taking longer to leave home or moving back into the family home as working age adults. The financial dependency, however, of older adults on their parents is now coming into focus.
‘The feeling of financial insecurity is often an all-consuming one that can have a hugely detrimental impact on a person’s mental, emotional and physical health. The antidote to financial insecurity starts early. If only every GCSE Maths student was taught the power of compound interest. Even the smallest savings habits can produce big results.’
