Third of young people expect redundancy and pay cuts

More than a third (35%) of young people expect to be made redundant or take a pay cut due the economic impact of coronavirus.

New data fromcomparethemarket.com’s Household Financial Confidence Tracker shows that 17% of 18-24 year olds believe they will be made redundant in the coming months and a further 18% anticipate that they will have to take a pay cut or reduced hours. A quarter (25%) of this age group say that they have already experienced a reduction in their take home pay since the pandemic began.

While anxiety around employment and pay is considerably higher among those starting out on the job ladder than other age groups, there is still a significant degree of concern among the general population about their employment prospects. Over one in ten (12%) expect to be made redundant and 14% believe they will have to take a pay cut or reduced hours.

The higher level of concern among 18-24 year olds about their job prospects is mirrored in data about this age group’s ability to pay their bills. Over a fifth (21%) struggled last week, up from 18% the week before; nearly a quarter 24% believe they will struggle in the coming weeks, up from a fifth (20%) a week before. This is the only age group whose financial anxiety is currently increasing.

By contrast, despite concerns over job prospects, the UK’s financial confidence about its ability to pay household bills in the immediate future has marginally recovered compared to last week. Across all age groups and demographics, 16% said they found managing household finances “difficult” over the last seven days, down from 18% a week before. Equally, 17% said they are worried about struggling to pay bills in the coming weeks, down from 20% a week prior.

Families with children living at home still demonstrate a higher level of financial anxiety, with 24% saying that they will struggle to meet financial obligations in the coming weeks – although this is a slight improvement from 26% the previous week.

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.”