It has been revealed that almost a quarter of young people aged 18 to 35 have been forced in to taking an additional job to make ends meet. This is due to the rising prices of many of the every day products that are available in shops and supermarkets across the country. The new findings come as a result of research undertaken by KIS Finance who are one of many commercial brokers who try to help consumers find the best possible deal for bridging loans and development finance.
Recent statistics illustrate that unemployment has fallen 3.7% in recent years. It is now at its lowest level in almost fifty years and shows that many may be having to take on additional roles to ensure that they can afford the basic necessities and essentials as inflation has risen to almost 9%.
Key statistics from the survey found:
•22% of those aged 18 to 35 have taken on an additional job to help them afford basic items such as rent, heating and food
•57% reported they are already struggling financially and expect things to get significantly worse in the near future
•The Southeast has been hardest hit, with 18% of the workforce forced to take on additional employment to make ends meet, with this rising to 20% in London
•Wales has been the second hardest hit part of the UK with 19% of those in Cardiff needing to find additional employment to pay their bills
Young people are being hardest hit at the moment as the economy is struggling and there may be a lack of job opportunities for them to gain a foot on the career ladder. This means that they will struggle to find adequate opportunities that will help them begin to earn a living for themselves and be able to afford the different daily essentials that are available in shops or services that they may need at home. This can mean that they may have to give up other items or services in order to ensure that they can manage their every day lives.
Some people around the country will have had to turn essential services off or use them less frequently in order to ensure that they can manage their every day lives. This may include the heating as their have been many cases of people being found around the country who are struggling to manage in cold homes.
Statasticians may look at the recent employment figures and think it is good news for the economy, but this is really hiding the facts that young people are struggling having to take on more jobs just to get by. The government regularly talks about creating high paid jobs to ensure that all work pays, but the reality is that one job simply may not pay enough to meet the ever increasing cost of living leaving many people struggling and having to resort to stte benefits in order to get by.
Interest rates from the Bank Of England are now at 1% and there is a forecast fifth rate rise in a row in the next month to try and control consumer spending. This is likely to increase economic pain and is likely to mean that the cost of many products around the country will rise due to increased inflation. The reality is that it is daily essentials that are coming under pressure, with many having to choose between items such as food or heat.
Inflation eating away at living standards
Whilst wages (excluding bonuses) rose by 4.2% between January and March, prices rose by 7%, leaving people considerably worse off in real terms. Those in the public sector have been hit the hardest, with pay increases nearer to 1.6%. On the surface pay growth in private sector looks much healthier at 8.2%, but this has been largely linked to bonuses. Therefore, this is not a steady indicator for future salary levels and won’t give people the security of knowing that their wages will keep up with inflation.
With inflation now at 9% (a 40-year high) and predicted to go as high as 10%, the pressures on household budgets are not likely to ease any time soon. The latest acceleration in inflation has primarily been linked to the rise in the energy price cap in April, which saw maximum energy bills jump by £693 to £1971. However, with the likelihood of a further price cap rise in the autumn, as well as the ongoing war in Ukraine, the pressure on global fuel and food prices will continue to be felt in the UK for some time.
There is also likely to be a shrinking work force in different sectors of the economy as young people will not be able to gain the training or experience they need in order to acquire a good quality, high paid job. This can leave the country on the brink of another large recession which will mean that the economy will shrink even further.
The Bank of England is warning that the UK could be left on the brink of a recession if inflation peaks at 10% later in the year. As trends in the labour market tend to lag behind other economic indicators, we may see a slowing down in the jobs market that could impact on those who are now relying on more than one job to make ends meet.
Holly Andrews, MD at KIS Finance comments on the findings:
“The news that inflation has risen to 9%, a 40-year high, is extremely concerning for those who are already struggling to get by.
The Government’s approach of increasing interest rates to discourage expenditure is having the effect of putting further pressure on those with variable rate mortgages, who are seeing their monthly outgoings increase on a regular basis. Those in rented accommodation are also being hit, as landlords look to increase rents in line with the increase in their own costs of borrowing.
With this coming at a time of severe shortages in the housing market, prices are being forced up, making it even harder for first time buyers to take that step onto the property ladder.
Meeting mortgage income criteria is also an additional challenge, as an increasing proportion of people’s salary is taken up with other essentials.
Given the combination of these different pressures, particularly on young people, the challenge of buying a first home seems to sadly be even further out of reach for many”.
