- In the UK, a quarter of young and middle-aged adults say the rising cost of living has pushed their personal debt to the highest it’s ever been, new report finds
- Brits are tied with Germans as the most likely in Europe to expect their financial situation to worsen in the next 12 months
- A fifth (20%) of young and middle-aged Brits now rely on borrowing money, saying it has become a normal part of helping them get by
- Tough economic times are fuelling a shift towards digital banking services in the UK and Europe, with increased consumer willingness to share financial data
17 July 2023: The reliance on credit during the cost of living crisis for millions of people across the UK and Europe has been laid bare in a new report, with a quarter of adults admitting their debt levels have never been so high.
The report from CRIF, Europe’s leading provider of digital transformation for financial services providers, includes analysis informed by the views of thousands of consumers across major European markets, including Austria, France, Germany, Italy, Spain and the UK.
The findings show one in four (23%) Europeans saying the cost of living crisis has increased their debt levels to the highest they’ve ever been. In the UK specifically, similar proportions of young (18-34) and middle-aged adults (35-54) said their level of personal debt was higher than ever (26% and 23% respectively). Overall, a fifth (20%) of young and middle-aged adults in the UK are now borrowing more money, saying it has become a normal part of helping them get by.
As a result, half (49%) of all Brits say the crisis has made managing their income and spending more challenging – slightly above the European average of 46% - and nearly a third (30%) now expect their financial situation to worsen in the next 12 months. This ties UK consumers with Germans in the having the most pessimistic views in Europe when it comes to their personal finances.
The squeeze has led to significant changes in the UK and Europe in how people look to manage their money. While one in five people (19%) in other European markets (Austria, France, Germany, Italy, and Spain) have reverted to greater cash usage to budget, the UK is the lowest of all countries surveyed when it comes to cash usage during the cost of living crisis (12%).
However, particularly among young adults, Europe has seen significant adoption of digital banking services to better manage their finances, with these shifting trends likely to continue beyond the current crisis. More than half (56%) of young adults in Europe said they would now manage their finances online or through an app more than they previously did.
Among young adults in the UK specifically, this includes:
- Using digital and app-based banking more than they previously did (50%)
- Utilising digital tools to help build up savings in the future (46%)
- Connecting third-party apps to banking services to gain greater financial insights (42%)
Crucially, more than four in ten (45%) young Brits said they would be happy to share more of their financial data – for example via open banking – if it helped them keep track of spending, save more easily and help with credit or loans applications.
The findings show shifting attitudes towards sharing personal financial data when the benefits of doing so are clearly communicated and underlines the growing importance of robust digital services for banks in the UK and Europe.
Sara Costantini, Regional Director for the UK & Ireland at CRIF said: