Nearly half of all British households are being forced to dip into savings, sell possessions, or borrow money just to cover basic living costs, according to a Which? survey. Consumer confidence in the UK economy fell by 13 points to -56 in February and March, the same survey found, while confidence in household finances dropped five points to -15, hitting its lowest level since April last year. A separate TSB and Lightning Reach survey indicates 66% of Britons are concerned about their economic prospects in the coming months, with 51% of those surveyed in debt and 42% of those in debt experiencing an increase in their debt burden.
This financial strain is reshaping living situations across the country. Nationwide research suggests the average age of Brits living in house shares is now 35, with 69% of people believing living alone is unaffordable. According to the same survey, 12% of people have moved home due to unaffordable living costs, and 10% are living with an ex for the same reason. Over 25 million Brits have likely felt embarrassed about their living situation, with nearly half of respondents saying their situation negatively affected relationships and personal lives. Brits think 29 is the age at which house sharing becomes embarrassing, yet 11% of people are still sharing houses to split costs and pool resources.
Young adults are reporting severe financial struggles with direct mental health consequences. A Citizens Advice and Loqbox survey found 65% of young adults aged 18-28 say money worries are damaging their mental health, and 64% wish they had learned more about managing bills before moving out. About one-fifth of young adults have been declined for a credit card or personal loan due to credit history. Among slightly older Millennials aged 30-45, 53% feel less financially secure than expected, according to an Intuit Credit Karma survey.
To manage daily costs, households are taking increasingly severe measures. The TSB and Lightning Reach survey shows 31% of Britons have cut back on essentials such as food and heating, while 38% reported their finances had deteriorated since last year. A quarter have depleted their savings to manage daily costs, and 16% have borrowed from family or friends. Among those in debt, 6% have fallen behind on payments. The Which? survey corroborates this trend, finding 49% of households forced to make at least one adjustment to ease financial pressure, with 26% regularly dipping into emergency savings to cover essentials.
In response, many are adopting adaptive financial behaviors and turning to the second-hand economy. A KPMG survey found one in 10 consumers choose buying second-hand as their first choice for non-food items, with 8% of all ages using reselling sites as their main way of buying non-grocery goods—a figure that rises to 15% among those aged 18-24. Thirty-three percent of people have sold an item via a reselling site this year, averaging five items. Among 18-29-year-olds, a Plum poll indicates 95% are finding savvy ways to save money without giving up luxuries, with 28% using reselling apps to make an average of £184 over the past year, 46% using the 'round up' setting on banking apps, and 33% using Lifetime ISA accounts to save for a first home or retirement.
Spending habits and psychological drivers are also shifting, particularly among younger generations. According to the Plum poll, 23% of Gen Z treat themselves to 'little luxuries' weekly, and 58% say their spending habits have changed over the past year, mostly due to the cost of living. For Millennials, spending is often tied to emotional states, according to the Intuit Credit Karma survey: 62% made at least one purchase in the past year shaped by feelings about ageing, with an average annual spend of £1,888 on such purchases. Forty-one percent say big purchases are more about helping them 'reset' than treating themselves, 32% tend to make big purchases when feeling stressed, and 37% have spent extravagantly due to feeling 'stuck' or burned out.
The long-term implications for mental health and social well-being from these persistent financial pressures remain unclear, as do regional variations in financial struggle beyond broad age categories. Specific government policies to address the widespread insecurity have not been detailed in the available surveys, nor have projections for consumer debt and savings depletion over the next year given ongoing economic uncertainties.