Millennials struggling to keep on top of finances amidst cost of living crisis

MILLENIALS feel less in control of their finances than any other generation as they battle with the pressure of the cost-of-living crisis.

In a nationwide study of 3,000 adults, 55 per cent of those born between 1981 and 1996 are struggling to stay on top of their money compared with 44 per cent of all those surveyed.

Millennials say they are struggling to cope with their finances

Millennials say they are struggling to cope with their financesCredit: Getty

Seven in 10 admit rising costs have already had an impact on both their short and longer-term financial goals, and three in 10 significantly so – which is more than any other generation surveyed.

As a result, nearly two-thirds (65 per cent) say they are now placing more importance on planning for their financial future than ever before.

Despite ongoing economic uncertainty, the vast majority (73 per cent) are confident the cost of living crisis will not stop them from achieving their financial goals in the long term.

However, when it comes to planning for retirement, the research, commissioned by saving and investing app Moneybox, revealed that more than half (55 per cent) admit just thinking about planning for retirement makes them feel anxious, overwhelmed, and even guilty for not having started planning for retirement sooner.

Two-thirds do not know how much they need to save for their ideal retirement or how much they have already saved.

While four in 10 have lost track of some of all of their old workplace pensions, more than a quarter (29 per cent) have given little or no consideration to how they will fund their retirement.

Caroline Murphree, managing director of investing, retirement and savings at Moneybox, said: “Even if you can’t afford to save as much as you would like towards long-term goals right now, history shows us that there will always be periods of growth and then periods of recession and so the key to success is not to lose sight of your future finances.

“A great first step is to find out how much you’ve already saved for retirement by tracking down any lost or forgotten pension pots – and you may find out you’ve saved more for retirement than you think.

“While saving for retirement is unlikely to be a top priority right now, taking control of your savings and learning how to plan early in life can make it so much easier to save what you will need for your ideal retirement.”

Concerningly, when it comes to money management, the survey by OnePoll revealed that less than four in 10 millennials have a good idea of their monthly outgoings and only 28 per cent regularly budget to help manage their finances.

In fact, just 27 per cent have a rainy day fund with at least one month of expenses. 

If personal finances continue to be squeezed, 34 per cent think they may need to reduce their pension contributions and 26 per cent think they’ll stop saving for retirement altogether.

On a more positive note, millennials were found to be more likely to be taking proactive measures to get their financial goals back on track than the national average.

This has seen 53 per cent of millennials cut back on luxuries, 52 per cent start a side hustle, and 35 per cent ask for a pay rise.

And 32 per cent are even taking on another job.

Caroline Murphree from Moneybox added: “There is no denying these are challenging times financially – our money can only stretch so far, but a big advantage of pension savings is that your contributions are boosted by tax relief and employer contributions.

“It’s essentially free money that rewards your efforts no matter how small.

“There are also some simple but important steps you can take now that will help you plan for retirement with greater confidence – for example, using a pension calculator can help you set a goal, make a savings plan and track your progress over time.

“You could also consider whether consolidating your old workplace pensions into one personal pension is right for you – you could save on fees, have greater control over how your retirement savings are invested, and better visibility on how they are performing.”