Generational Divide in Budgeting Habits

Posted by Tom Magor in Personal Finance on 21 October 2016 - Tom is a Senior Credit Analyst at checkmyfile.

While consumers typically have a lower level of disposable income than has been enjoyed in previous years, it has been revealed that those aged over 55 are half as likely to budget their expenditure, compared to their younger counterparts.

A report compiled by SunLife states that the younger generation are more than 70% more likely to budget than those over 55. A mere 35% of those aged over 55 formally set a budget, representing a 5% reduction since 2015. As a result, almost two thirds don’t plan their expenditure, with 1 in 5 only claiming to have a rough idea regarding their financial situation.

The younger generation are also more likely to utilise technology as part of the budgeting process with a quarter of those aged 18-24 employing either an app or online tool. In contrast, only 3% of over 55s use comparable technology, while a third use a spreadsheet or notebook.

Perhaps due to the higher cost of living, those residing in London are the most likely to devise a budget. 56% of those living in the capital analyse their expenditure, 9% more than the UK average. Londoners are also most likely to utilise technology with nearly a quarter using such tools. In contrast, those residing in Scotland are the least likely to budget with only 40% deriving a detailed plan with nearly 20% stating they only have a rough idea regarding their financial situation.

Ian Atkinson of SunLife says, “It is interesting to see that while overall there is a slight increase in the number of people who are budgeting formally, amongst over 55s budgeting is down while among young people it is up, making that gap between the generations even wider.

“This may just be because there is more technology available to younger people, so using it to budget just comes more naturally, or it could be because they have to watch the pennies. This is a generation that started becoming financially responsible during a recession, are saddled with huge university debt and need to save £33,000 on average just to get on the housing ladder. And now, post Brexit, their financial futures are even more uncertain.

“In comparison, recent figures show over 55s in the UK to be the richest property owners in the world while our research shows they have more than five times the savings of 18-24s (£46,416 on average compared to £9,094 for the 18 to 24s). So it could be that over 55s are not budgeting as much because they don’t really need to.”

Check Your Multi-Agency Credit Report

30 Day Free Trial

Why Don’t Millennials Take Out Credit?

As a millennial, it can feel like my generation is besieged with criticisms on a daily basis, and not all of them are entirely fair (though lots are). We are frequently told that as a generation we are entitled, we have it so much easier than our elders and arguably, worst of all: we buy too many avocados. While I don’t buy avocados, I do have access to credit, which makes me a minority among my age group.

Published on 16 May 2018 by Beth Jennings

Full Article

Why Is My Loan Balance Wrong On My Credit Report?

One of the single most important pieces of information to appear on your credit file is the information relating to your credit agreements and how you repay them - with this information lenders can see your borrowing history across the last six years and use it to help them decide whether or not to offer you finance.

Published on 7 May 2018 by George Coburn

Full Article

How long do closed accounts appear on my credit report?

Some people believe that as soon as a credit agreement is settled and closed, it will no longer be reported to the UK’s Credit Reference Agencies and therefore will no longer have an influence on future credit applications. However, this is a popular misconception, one that could affect your ability to get credit if not correctly understood.

Published on 2 May 2018 by Tom Magor

Full Article

How to Save Big in the Bank Holiday Sales

Bank holidays may not guarantee a day of sun-soaked fun, but as is British tradition, we’d probably be quite happy barbecuing in the snow if it came to it. But no matter what your plans are, if you want to grab a bargain, you can use the Bank Holiday sales to save some serious money.

Published on 26 Apr 2018 by Kiah Phillips

Full Article

Should I Buy or Finance an Aston Martin Valkyrie?

We’ve all been there. £3 million burning a hole in your pocket and a track-going version of Aston Martin’s latest hypercar sat in front of you. But as a shrewd, savvy business-type, you know that dropping £3m in one go on a 1,100bhp car could be considered a questionable, perhaps even ‘baller’ move. But what about putting it on finance?

Published on 13 Apr 2018 by Jamie Mackenzie Smith

Full Article

How to Build Credit History Without a Credit Card

When it comes to the best way to build up a credit history, conventional wisdom is to take out a credit card and use it for everyday purchases, while paying it off (on time) at the end of every month. There’s plenty to support this advice too, as a credit card allows you to spend as much or as little as your limit will allow, while building a history in a reasonably short amount of time.

Published on 26 Mar 2018 by Jamie Mackenzie Smith

Full Article

Which Credit Report Information Can Landlords See

Whenever you rent a property, you will be required to pass some checks set by the landlord or letting agent to prove that you will be a good tenant and that you’ll be able to afford to rent the property.

Published on 19 Mar 2018 by Kevin Pearce

Full Article

Do Student Loans Affect My Ability to Get Credit?

For many people, a student loan is the single largest chunk of borrowing they ever take out, second only to a mortgage. With course fees alone now coming to more than £9,000 per year and then the added maintenance loan on top of it, you can easily end up borrowing £40,000 during your studies.

Published on 8 Mar 2018 by Jamie Mackenzie Smith

Full Article

How Far Back Can I get my Credit History?

For your recent payment history information, your credit file has everything you need; that’s why it’s given so much importance by lenders whenever you apply for credit. But if you’re looking for information that’s six years old or more, it’s probably not be the best place to start.

Published on 7 Mar 2018 by Jamie Mackenzie Smith

Full Article

Are Car Insurance Premiums Calculated Fairly?

Recently news stories have emerged alleging that a “John” might be more likely to get a cheaper car insurance quote than a “Mohammed”, and that someone with a Gmail account could be offered a lower premium than someone with a Hotmail email address.

Published on 12 Feb 2018 by Jamie Mackenzie Smith

Full Article


We have loads of great customer reviews