As the cost of living crisis deepens, many young people in the UK are seeking financial advice from their grandparents, who lived through periods of high inflation in the 1970s and 1980s. A survey by Deloitte found that nearly half of Gen Z and millennials spend their entire monthly income on living costs, while two in five have taken on additional work to make ends meet.
Luke Downham, a 26-year-old biomedical scientist for the NHS, said he is living pay day to pay day. His rent is set to increase by 10% this month, and he has taken out a consolidation loan to pay off rising debts. “It’s pretty depressing because I’m just kind of starting my life,” he said. “I feel like my friends and family are all in a similar situation. This world is not sustainable.”
According to the Joseph Rowntree Foundation, more than 70% of low-income households with an 18- to 24-year-old are in arrears with at least one household bill, and over 80% of those with an 18- to 34-year-old are going without essentials. Rachelle Earwaker, a senior economist at JRF, warned that many young adults may have to move home due to rent arrears or inability to pay energy bills.
Some individuals have dipped into savings or changed habits, such as walking to work instead of driving. Others have moved in with family or roommates as rents and energy bills rise. The impact can be detrimental to credit ratings and the ability to build skills, education, and financial security, Earwaker added.
Josh Ryan-Collins, head of finance and macroeconomics at UCL, suggested that decarbonising the economy could address low income, inflation, and the environmental crisis simultaneously. “It would create decent, well-paid jobs, it would help us meet our net zero carbon targets, it would relieve unemployment and low wages in the regions of the country which are suffering most, and it would eventually help us deal with inflation,” he said.
Meredith, 31, who left her corporate job as a product manager, now finds herself searching for a similar role as a recession looms. She owns a home with her boyfriend, and their energy bill recently rose to £177 a month. “We’re scraping by,” she said. “Holidays aren’t really an option, and I wouldn’t even think of having children.”
