Some 21 per cent of younger Brits are thinking about their financial futures because of current high inflation.
Research by Standard Life found financial issues to be top of the agenda, with 16 per cent of younger adults saying rising inflation prompted them to find out how much money they will need to live on in retirement.
Inflation unexpectedly rose to 4 per cent in the year to December 2023, an increase from 3.9 per cent the month prior.
Although forecasts suggest inflation will begin to steadily fall, Richard Carter head of fixed interest research at Quilter Cheviot said that the UK’s battle with inflation was not over.
Inflation and rising interest rates have impacted younger Brits, with essentials likely forming a higher percentage of their monthly spend and the cost of rent putting pressure on finances.
Gail Izat managing director for workplace at Standard Life pointed out while economic conditions over the past few years have been difficult, it may have also helped more younger Brits to start thinking about their financial futures.
She said: “The fact this seems to have led younger generations to consider their long-term financial planning more is perhaps one positive to take from the situation, as it’s likely to improve their outcomes in retirement.”
Izat highlighted employers and providers currently have the opportunity to better support younger employees by providing engaging tools and focusing on financial education and wellbeing.
It comes as the Hargreaves Lansdown Savings & Resilience Barometer found the financial resilience gap between higher and lower earners has widened by 4.5 points since 2019.
Hargreaves Lansdown also expected later life planning to worsen in 2024.
However, Myron Jobson , senior personal finance analyst at Interactive Investor warned that it was still important for young adults to continue planning for their futures so they "not only survive, but thrive".
He said: “Keeping long-term goals high up the priority list helps build financial resilience and ensures stability beyond current difficulties. It promotes a balanced approach, preventing short-term decisions from jeopardising future financial well-being.”
alina.khan@ft.com
