Gen Z under threat from rising bills – even if they cancel Netflix

Generation Z are far more likely to be living on the edge – only 14% have enough spare cash to be resilient to rising prices – compared to 52% of Millennials, 60% of Baby Boomers and 64% of Generation X.

Fewer than one in five people on the lowest incomes have enough money left over at the end of the month to be comfortable.

Three in five renters don’t have enough wiggle room in their budgets to face price rises with confidence.

Single people are half as likely to be resilient as couples when measured this way.

Figures from the HL Savings and Resilience Barometer, produced with Oxford Economics, released in January 2022.

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown: “Looming price rises are hanging over all of us, but there’s a huge gulf between the generations, and  Generation Z are far more likely to be running on empty. They already have far less money left at the end of the month than anyone else, and with price hikes adding hundreds of pounds to bills this spring, it could be enough to push them over the edge.

“Their age means they’re far more likely to have the characteristics that make them most vulnerable, because they have lower incomes, fewer of them are in couples, and there’s a good chance they’re renting. It’s no wonder there was such a backlash to the suggestion they could solve these huge structural financial inequalities by giving up Netflix.

“The lower our incomes are, the less likely we are to have cash left at the end of the month. We found those on the lowest incomes were half as likely to have enough breathing space to handle rising prices as those on average incomes. And while average earners have more robust finances, they’re not out of the woods either, because fewer than half had enough left at the end of the month to be able to cope with things like rising bills.

“Whether or not we own our own home plays a major part too. Of course, anyone who has paid off the mortgage, is likely to have more cash to spare, but those on mortgages have more than those paying rent too. This owes much to the fact that rents absorb such a massive proportion of income – at 31% compared to the 18% that mortgage holders pay.

“Single people are far more likely to be living close to the edge than couples: 44% of single people living on their own had enough cash left over at the end of the month to be resilient, compared to 80% of couples living on their own.

“However those in Generation Z can take a crumb of comfort from the fact they they’re less likely to face one of the factors that put people at a huge disadvantage financially. The barometer found that having children living at home leaves people with less money at the end of the month. Couples living on their own have the most wiggle room in their budget, while single parents have the least.”