Millions of Britons are being forced to raid their future financial security, with alarming new figures revealing a nation dipping into pensions and long-term investments just to make ends meet.
The Office for National Statistics (ONS) has released a stark report showing that nearly one in four adults (22%) resorted to using savings from their current or previous month's income in January 2024. More worryingly, 15% of adults reported selling assets or dipping into investments, while a further 7% increased their personal loan or credit card debt.
A Generational Divide in Financial Pain
The data exposes a deep generational split in how the cost-of-living crisis is being managed. The burden is falling disproportionately on younger adults, shaking the foundations of their future financial health.
Among those aged 25 to 34:
- 29% sold assets or dipped into investments.
- 13% reported borrowing more money.
This is in stark contrast to the over-65s, a demographic largely shielded by the state pension triple lock, where only 4% sold assets and a mere 1% borrowed more.
Expert Reaction: A 'Future Financial Timebomb'
Sarah Coles, head of personal finance at investment giant Hargreaves Lansdown, issued a grave warning, labelling the trend a "future financial timebomb."
"For those who are eating into longer-term investments or raiding their pension, they’re building a financial timebomb for the future," she said. "It means making incredibly difficult decisions about how to make it through another tough month."
The ONS data also highlights a worrying reliance on credit, with 39% of adults using credit more than usual, borrowing from friends or family, or taking out loans specifically to cover soaring energy bills.
Glimmers of Hope Amid the Gloom
Despite the bleak overall picture, there are small signs of resilience. The proportion of people struggling to afford their energy bills has seen a slight decrease, dropping from 26% to 21% over the past year.
However, the overarching narrative remains one of financial strain. With millions compromising their long-term security for short-term survival, the report paints a concerning picture of the UK's economic health and the difficult choices facing households across the nation.
