Last month, the Retail Price Index, the Office for National Statistics’ monthly measure of inflation, hit a 30-year high of 7.1%. This alarming number means things cost more for people to buy, especially when stagnant wages are taken into account.
The so-called ‘cost of living crisis’ has been well documented by the media in recent months, with talk of pensions, savings and mortgages. This is all relevant and important to know, but there’s a demographic that’s been overlooked in the commentary: young people. 18-30 year old workers in the UK are feeling the cost of living crisis more than any other age bracket. Most have lower savings, higher rents, and massive student debt. This is borne out by research from a leading think tank, Demos, in October 2021, which said that nearly half (47%) of 18 to 30-year-olds have low financial resilience.
There’s an argument that we’re now seeing a direct impact of this through a change in working arrangements. Young professionals want more flexibility with their work. Ipsos Mori published findings earlier this month which showed two thirds of Brits would rather continue working from home than return to the office full time. And can you blame them? Rents are through the roof, especially in London, and travel is more expensive than ever. Young people are trying desperately to save, whilst doing what they’re told is important for themselves and the economy (socialising and spending), and it’s taking its toll. Instead of rubbishing this idea, employers and officials should be tolerant and respectful.
These changes have come about due to rising costs in almost every aspect of life, from transport to leisure activities. Take for example, a typical young employee trying to prove themselves in the world of work. From the moment they wake up, they’re penalised more than their parents (or, on occasion, even grandparents). The water and heating bills have increased. Basic food items like milk and bread have increased. The suits and blouses they pull on are more expensive. These claims are supported by the CBI, who noted that retailers have hiked their prices at the fastest rate since the 1990s. Even after-work drinks in town with colleagues are more expensive thanks to high rents and alcohol duty.
It’s no wonder young people are choosing to make changes to their lifestyle and working practises. The savings they have are, on average, smaller than their grandparents’ were, shown by low homeownership levels. This picture of demographic inequality is bleak even before considering the difficulty of getting on the property ladder. A recent Bank of Scotland survey showed that only 21% of 18-34 year olds north of the border have a mortgage. This number needs to increase if young people today are to have the same opportunities as their predecessors. While innovations like the Lifetime ISA have been welcomed and are helping people get onto the ladder, if older generations don’t pass down the wealth, younger generations are in trouble.
As we might expect, a cost of living crisis hits the poorest economic groups and youngest demographics hardest. As young people across the UK grapple with this crisis as well as increased Covid restrictions, expect to see young people demand more in the way of working arrangement and perks. So the next time you get on a train, buy a pint, or pay your bills, spare a thought for those who are often running to stand still
George is an Account Manager at iNHouse Communications.