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Consumer Credit


Gen Z under threat from rising bills


Generational wealth divides will provide a challenge for lenders and collectors


Sarah Coles Senior personal fi nance analyst, Hargreaves Lansdown


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 fi ve people on the lowest incomes have enough money left over at the end of the month to be comfortable. Three in fi ve renters do not have enough


wiggle room in their budgets to face price rises with confi dence. 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.


Looming price rises 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 are 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 is a good chance they are renting. It is no wonder there was such a backlash to the suggestion they could solve these huge structural fi nancial inequalities by giving up Netfl ix. The lower our incomes are, the less likely we are to have cash left at the end of the


24 www.CCRMagazine.com


month. We found those on the lowest incomes were half as likely to have enough breath- ing space to handle rising prices as those on average incomes.


Robust fi nance And while average earners have more robust fi nances, they are 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


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


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 mort- gages 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 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 are less likely to face one of the factors that put people at a huge disadvantage fi nancially. 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. CCR


March 2022


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