Over a third of young people expect a pay cut or redundancy
Financial anxiety among 18-24-year-olds is becoming more pronounced, our latest Tracker shows…
An alarming 35% of young workers expect to be made redundant or take a pay cut in the coming months, as the coronavirus pandemic tightens its grip on the UK economy.
Comparethemarket.com’s latest Household Financial Confidence Tracker makes “grim reading” for 18-24-year-olds – the only group to have registered an increase in financial anxiety over the last seven days.
Elsewhere, there are signs of confidence slowly but surely creeping back into UK households, with a week-on-week reduction in the proportion finding financial management a problem.
Insecurity among young employees
The latest Tracker highlights a worrying 17% of 18-24-year-olds who believe they’ll lose their jobs over the coming months.
An additional 18% anticipate the very real possibility of a reduction in pay or available hours – while a quarter (25%) of this age group have already had to deal with a pay cut.
Younger workers’ high level of job insecurity is also reflected in their confidence over personal financial management. With 21% admitting to struggling last week – up from 18% the week prior – it is indeed the only group experiencing increasing financial worry.
Almost a quarter (24%) think they’ll struggle in the coming weeks, compared to a fifth the week before (20%) – leading many to explore further borrowing options.
Anna McEntee, product director at comparethemarket.com, said: “The proportion of people who are starting out in their careers who fear that they will be laid off in the near term or see their salary fall makes for grim reading.
“With so many people having to increase borrowing or take payment holidays to meet their household costs, we are potentially heading towards a crunch point where people – particularly younger people who have less by way of savings – are required to pay back money they owe with less income behind them.
“It will be incumbent on financial services providers to be as flexible as possible to help their customers through what promises to be an extremely challenging period of time.”
Small signs of renewed confidence
The latest data does shine some positive light on the UK’s financial revival, with fewer households overall saying they found managing their outgoings ‘difficult’ in the last week.
Across all age groups and demographics, 16% fell into this category which – in comparison to last week’s 18% – represents a small improvement. Equally, 17% say they’ll struggle to pay their bills in coming weeks – a reduction of 3% on last week’s proportion.
Still though, a concerning 12% of the general population expect to ultimately be made redundant as a result of COVID-19, with 14% anticipating a cut in their pay or hours.
And families with children living at home continue to demonstrate higher levels of financial anxiety than those without – even though this week’s 24% who’ll struggle to meet financial obligations is down 2% from the previous week.