30- and 40-somethings in the danger zone – especially after mortgage hikes

81% of people in their 30s and 40s are worried about the cost of living – compared with 76% overall. 51% of them are spending less on food and essentials – compared with 41% overall. 42% of them couldn’t afford a £850 bill out of the blue (30% overall), 30% have had to borrow more (20% overall),  and 22% are using credit to manage rising prices (14% overall).

They are twice as likely to be behind on energy bills as the overall figure (8% compared to 4%). 53% of people in their 30s and 40s are worried about higher mortgage rates (48% overall).

The ONS released its public opinions and social trends survey today: Public opinions and social trends, Great Britain – Office for National Statistics

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown said: “People in their 30s and 40s are barely hanging on by their fingertips. Assaulted on all sides by the cost of living crisis and the pressures of the squeezed middle years, their finances are being forced over the edge. They’re more likely to worry about rising costs, be cutting back in a desperate effort to make ends meet, and still to be falling short. Meanwhile, the threat of mortgage rates leaves more than half of them in a cold sweat.

“These are often the most expensive years of our lives. The average age to buy your first home and to have a child is 30, so those at the younger end of the spectrum might be wading through all the associated costs of doing up their first property, and caring for young children. The horrendous cost of childcare for the first five years would throw anyone’s finances into disarray.

“Even further up the age spectrum, many families will make compromises around work to care for children outside of school times. Meanwhile, there may be more mouths to feed, growing kids to clothe, and all the associated expenses of suddenly finding your pay packet split infinitely more ways. As you get into your 40s, there’s an increasing likelihood that your own parents need support too – so you could fall into the sandwich caring generation, where your income is spread even thinner.

“It means this group are more worried by rising prices, they’re more likely to have had to borrow more than this time last year, more than half of them have had to cut back on food and non-essentials, and they’re twice as likely to be behind on energy bills.

“They also have less money set aside for the kinds of emergencies that are even more likely when you have so many people depending on you. Some 42% couldn’t afford a £850 bill out of the blue. This is only the second time this figure has breached 40% since the ONS started asking the question this time last year – the last time was during the expensive summer holidays.

“Of those with a mortgage, they’re more likely than any other age group to have a fixed rate (82% compared to 70% overall). However, they’re also more likely to be worried about rising rates: 53% of them are concerned compared to 48% overall. This may well be because plenty of them have bought relatively recently. They may have snapped up a first home, or traded up after having a family, and bought at a time when property prices were sky high. Those who bought during the rush of the past few years may be sitting on an incredibly low mortgage rate, so they’re eying today’s higher rates with mounting dread.”