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More than half of young adults in the UK have, or are considering, altering “major life milestones” to cope with strained financial circumstances, new research has found.
More than one in two 18- to 34-year-olds (56 per cent) have either had to delay or cancel significant life events or have “been forced to rethink” pursuing them due to financial concerns, according to wealth adviser St James’s Place, which surveyed 6,000 UK adults.
To save money and avoid overspending, one in 10 of those surveyed have found themselves renting for longer than planned to avoid homebuying costs including property taxes and other fees such as stamp duty, while 8 per cent are altering plans to move house or reconsidering decisions to have children.
Nearly 10 per cent have delayed wedding plans, while just under 5 per cent are even putting off getting divorced due to the costs of splitting up, which can amount to thousands of pounds.
Alexandra Loydon, group advice director at St James’s Place, said: “Your twenties and thirties are hugely exciting years, with many people hitting major life milestones.”
She added: “Those moments naturally come with additional financial costs, which can be a struggle to meet, particularly in the current climate.”
This was echoed by Ian Futcher, financial planner at wealth manager Quilter, who noted that achieving financial goals is “near-impossible on average wages”.
“Many young people are trying to plan ahead, but the cost of taking the first step is often out of reach,” said Futcher.
“Financial progress has become far less accessible. Without action . . . there’s a risk this becomes a lasting feature of adult life.”
Financial woes have also caused many to reassess pursuing further education, due to the cost of student loans, affecting career ambitions.
Additionally, nearly 20 per cent were changing jobs or thinking of doing so to boost their income.
The younger generation has felt the strain over the past 12 months with more than a quarter reporting that their financial situation had worsened over that period.
The reasons for tighter finances ranged from the higher cost of living, stagnant salaries and spiralling rental and mortgage payments.
Pressing everyday costs and the decision to go forward with achieving more immediate financial goals, such as putting down a first home deposit, have also led a portion of young people to defer making retirement savings in the hope that inheritance will fill the gap.
Research from life insurance group Standard Life found nearly a quarter of Gen Z and millennials are not focused on saving for retirement as they expect to receive money or property in the future.
“While it’s true that millennials and Gen Z are set to benefit from a significant wealth transfer from Baby Boomers over the coming years, inheritance is rarely guaranteed,” said Dean Butler, managing director for retail direct with Standard Life, a major pension provider.
For those who had paid for a significant event such as a wedding, honeymoon and choosing to have a child, funding additional costs that come with these plans was reported as impacting their financial situation.
“Many 18 to 34-year-olds . . . will probably feel overwhelmed and saddened by this,” added Loydon.
“It’s therefore important that they get a sense of their finances, explore their options, and build a realistic plan.”
Eighteen to 34-year-olds are now taking action to improve their finances with more than half reviewing their outgoings. Others have explored potential savings on household bills, better rates on savings and claiming all childcare vouchers they are entitled to.
Loydon noted that it was “positive” that young people are taking “proactive steps to improve their personal finance” to fund and proceed with planned events.
“Simple actions such as making a budget, and maximising savings rates and tax allowances can help you take control and ensure you’re making the most of your well-earned money,” she concluded.
