Yorkshire Building Society has issued a warning around the detrimental long-term economic impact that the cost-of-living crisis could have on young people.

A study by the building society found that seven in 10 (70%) young people plan to cut spending on non-essential items to make ends meet.

According to Yorkshire Building Society’s Inflation Nation report, which asked 4,000 adults across the UK a series of questions around their ability to cope with the cost-of-living crisis, a quarter (24%) across all age groups intend to cut back on non-essential items, including leisure activities, inessential clothing, trips to restaurants, holidays and trips to the pub, by £50 to 99 a month. Another fifth (19%) plan to do so by £100 to 199.

As well as being the group most likely to cut back on spending, the society stated that young people – those under the age of 40 – were also considerably more likely to cut back by more than their older counterparts. The research found that 23% said they would reduce monthly outgoings on non-essential items by £100 to 199, while 14% said they would do so by as much as £499.

“With the cost-of-living increasing, people are doing the sensible thing and looking at their finances and assessing where they can save – and no group more so than the young,” said strategic economist at Yorkshire Building Society, Nitesh Patel.

“For most, this means cutting back on things that, whilst they enjoy, they feel they can do without. This includes going out for dinner, going to the pub with friends, leisure activities, buying clothes you don’t necessarily need and holidays. Cutting back on non-essential spending is something that people could do in order to navigate the coming months – and even years.

“As inflation approaches double figures, it is showing no sign of abating any time soon. And to make matters worse many people are seeing their earnings grow by less than inflation.”

Patel also stated that reduced spending where possible can ensure that young people can not only cover their costs, but also support them to stay on track and meet major life milestones.

The society’s research also found that almost a third (29%) of those under 40 say living costs are becoming the biggest barrier to saving for a deposit to buy their first home.

“Cutting back culture and leisure activities, however, comes at a price to the economy in what is somewhat of a vicious circle,” Patel added. “If people are not spending, businesses cannot survive. Taken to the extreme, this could be closures and job losses – especially for those businesses still recovering in the aftermath of the pandemic.

“Business, as well as people, are going to need considerable support to see them through what is undoubtedly going to be a very difficult period.”

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