A generation on ‘pause’ as cost of living concerns lead to delays in starting a family

• More than 1 in 5 (22%) of 18–34-year-olds said concerns about the cost of living had directly affected their family planning.
• Parents with children under the age of three are feeling the impact of the cost-of-living crisis the most.
• More than a quarter (27%) of parents with young children under three finding themselves overdrawn regularly or occasionally, with 1 in 10 (9%) needing to borrow money to cover monthly expenses.

A new report* published today by Royal London, the UK’s largest mutual pensions, protection and investment provider, shows significant increases across housing, energy and food bills, and childcare, since February 2023 mean the average family with young children have seen their expenses rise by over £1,000 a month**, leaving almost a fifth (18%) of parents with no money for unexpected bills or emergencies.

The Financial Resilience Report 2024 – Weathering the cost of living crisis – also highlights how increased costs for everyday bills and essentials has not only had a financial impact, but an emotional one too. Almost a third (31%) of people in the UK are fearful about the future, with two fifths (40%) of parents with children under three feeling lower in mood and more than a quarter (27%) feeling ashamed about their financial stability.

It’s therefore not surprising that 1 in 10 (10%) people suggested that cost of living concerns had directly impacted their family planning, with people suggesting they will either delay having children, have fewer children than they planned or even abandon their plans for children altogether. This figure rises to more than 1 in 5 (22%) of those aged 18-34, and almost 1 in 10 (8%) people in this age group said they were delaying having children because they didn’t have the money right now.

Sarah Pennells, consumer finance specialist at Royal London said:

'We’ve been tracking how people have been responding to the financial challenges of the rising cost of living for more than two years and it’s clear we’re now starting to see that people are making changes to their longer-term life plans. When prices for food and energy were increasing, we saw people cut back and make changes to their spending and shopping habits, but now we’re seeing that some major life decisions are being delayed as people are weighing up whether or not they can afford to act on the plans they’d made.'

Findings in the report also show that despite those between 35-49 years old having the highest average annual personal income, 1 in 5 (20%) admit they are close to falling into, or are already in, financial crisis (unable to pay major household bills), compared to just 13% on average for the sample as a whole.

High interest rates and rising mortgages have hugely impacted people in this age group, with average monthly outgoings rising by £588 per month** since February 2023, leaving 34% overdrawn regularly or occasionally or having to borrow money to cover monthly expenses, and almost a quarter (23%) with no savings at all.

Sarah Pennells continues:

'It’s worrying that so many people are going into the red or borrowing to afford monthly expenses. Interest rates on overdrafts can be high and if you’re dipping into your overdraft regularly, that could be a warning sign that your finances may not be sustainable. We know that high interest rates, which have fed through to higher rents as well as mortgage rates, are causing a real squeeze in the finances of many people in their 30s and 40s. Even if the Bank of England reduces interest rates later in the summer, it won’t help those homeowners who’ve had to remortgage onto a higher fixed rate deal. In some cases, this is costing families hundreds of pounds extra a month.

'There are still a number of things that people can do to improve their financial resilience and to support the plans they want to make for the future. For example, if you don’t have a budget and, especially if you’re going overdrawn or borrowing regularly, it’s worth getting one. A spending diary, where you make a note of how much you spend and what you spend it on, is useful for highlighting where money is slipping through your fingers.'

For more tips and guides on reducing outgoings and where to get help and support visit:

How to cut your bills - Money guide