‘Millennials’ is the buzzword of the moment, but not one I particularly like. I don’t think all adults under-30 should be lumped together in one socio-economic group. We’re not all the same.
But when it comes to certain issues, many of us are in the same boat. And new research backs this up.
Fidelity’s latest ‘Generational Inflation Barometer’ reveals that millennials have seen higher rises in the cost of living than other age groups. The rate of inflation (which measures changes in the cost of goods and services) rose by a third – from 0.6% to 0.8% – in the year to June 2016.
This figure is at least double that of older generations. Over the same period the annual inflation rate was 0.4% for generation X, baby-boomers, and those over 65, and 0.3% for those over 75.
Spending on rent and eating out are pinpointed as the two key reasons why the under-30s have borne the brunt of the rising cost of living.
Compared to older generations, millennials spend proportionally less in supermarkets – 8% of income, where prices of food and soft drinks are falling, and more – 14% of income – on café culture and eating out, areas which have seen higher inflation over the past year.
Now, this is a lifestyle choice, and something that’s easy to combat. We can shop more in supermarkets rather than eating out and boost our spending using loyalty cards and cashback credit cards.
We can budget to ensure we don’t fritter away our pay packets on unnecessary items, download coupons online to get money off, and buy cheaper own-brand goods.
And where we do treat ourselves, we can ensure we always use a voucher to get money off. Moneywise brings you the top 10 restaurant deals to get your teeth into every Friday. Follow @Moneywiseonline on Twitter for the latest deals.
But Fidelity’s report goes on to say that we spend a far bigger chunk of money – at almost a fifth of our income (19%) – on rent and bills.
This is a harder spending gap to plug. We can cut the cost of bills by shopping around for the cheapest broadband and TV packages and haggle for lower prices or for a freebie to be thrown in.
When it comes to gas and electricity, we can compare tariffs and switch to save potentially £100s – visit www.moneywise.co.uk/compare to see if you can cut costs.
And while we can’t switch water provider, we can avoid water wastage to keep bills down by fixing dripping taps, installing water-saving devices, collecting rainwater for use in the garden, and only boiling the water you need.
But rent is where the under-30s are really getting a raw deal, and there’s not an awful lot we can do about it – especially when getting on the property ladder is even harder, given runaway house prices in many parts of the UK. In the three months to July 2016, house prices were 1.6% higher than in the preceding three months, according to Halifax’s latest House Price Index.
More needs to be done to help renters – perhaps longer leases or rent caps limiting increases to the inflation rate.
In the meantime, make the most of government schemes available to help wannabe homeowners, such as the Help to Buy Isa. If you can save up to £200 a month, the government will top up your Isa by up to £3,000 when you buy.