Oh I quite agree. A small amount put away each month is better than nothing, and it’s putting people in a saving mindset.
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I don’t think we can discount the fact that 22 to 29-year-olds would’ve been 12 to 19-year-olds in 2008, so they wouldn’t know what it’s like to manage finanaces pre-austerity, when savings accounts actually had attractive - rather than least-worst - rates on offer.
For many, then, it would’ve made more sense to save or invest elsewhere, where they may get a high return. As already mentioned, current accounts and (linked) regular savers, for example.
As the article itself notes, “The squeeze on pay and the prevalence of insecure work mean many cannot put money aside” and “Home ownership has also fallen since the financial crisis, with the proportion of 22 to 29-year-olds with their own property falling by 10 percentage points.” Both those factors mean many 22 to 29-year-olds are living paycheque to paycheque, with the vast majority of their income going on rent and bills, meaning they’ve little to nothing left to live on afterwards.
I have to take objection to comments like It has become a trend now to have the latest tech and designer clothes RIGHT NOW because everyone wants to be cool and have it first. This is where people get a £1,000+ iPhone on a contract, buy now pay later on a massive HD TV or put clothes it on their Very.co.uk credit account." because this does seem to contain some fundamental misunderstandings.
Firstly, it’s no behaviour related to age - you’ll find people behaving that way in every age group, so it’s unfair to single out this particular age group.
Secondly, it hasn’t ‘become’ a trend, as this behaviour was also exhibited in the '00s, '90s, and '80s - people have always wanted the latest things. It’s not new behaviour.
Thirdly, mobile phones and computers are almost essential now, as there are so many things in modern life that rely on them. Even many government services are accessed online, and not having means of accessing them puts people at a huge disadvantage. Therefore what may seem like a frivolous purchase of a phone (or computer) may actually be an essential tool for modern life.
Lastly, massive HD TVs are much cheaper than you’d think. Plenty of budget brands around, and discounts on older models, which means that the massive HD TV someone might have is very likely comparatively cheaper than the crappy old CRT boxes people had back in the day.
In terms of credit card debt, I do think a lot of the problem is people aren’t taught practical financial principles at school, hence why some see it as ‘free money’ as opposed to ‘borrowing from yourself in the future’. Again, this isn’t linked specifically to this age group, and as noted, fewer people from this age group are in debt than used to be!
tl;dr, am hugely sympathetic to the challenges facing younger adults today, and recognise that many of the problems they face in saving are not necessarily of their own making.
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The thing with debt is that it sometimes makes sense. I don’t buy a lot of new things but I do like having a nice phone. So I’ve got a galaxy s9 on the Samsung upgrade programme. It’s a 0% interest loan so it wouldn’t make sense to take money out of my savings account which gets interest and use it for the phone. So even though, technically I’m in £600 Of debt, I could pay it off instantly
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Absolutely.
I can remember talking to a hotel check-in clerk in Seattle in the early 80’s. She had her main job which paid all the bills and gave her health care. She was working PT at the hotel to save enough to buy a new car which she did every 8 years or so.
Shortly after that we had big bang in the City, Thatcher/Reagan and me now. Cars would be bought on finance and changed every 5 years and today the depreciation is financed by lease and cars are changed every 3 years. The job of check-in clerk is now someones main job.
Yeah that totally makes sense. I do this too but with credit cards. Why stretch my finances for the rest of the month when I can stick it on a credit card and spread it interest free over a few months and even get a better credit rating for doing so! It blows my mind how it’s “better” to do it this way than buying it outright.
I guess my main argument is what some people argue as essential these days really isn’t. One summer I worked in a job centre and I had people complain that they had no money and needed more but when you looked into their finances they said that they needed a car because they wouldn’t be caught dead catching a bus. Likewise they wanted Sky TV because otherwise they would be bored senseless at home 
It is this attitude that irks me. There are many more of these too but my point is that they really could live without them or at least for a little while until they got back on their feet or met their goals.
If you combine this and compare it to other decades it is far easier now to get into debt from subscriptions, contracts, loans and finance than it ever was.
Disclaimer: I know not everyone is like this but you’d be surprised at how many people I saw in that temporary job who had this ‘entitled attitude’ - it was unreal.
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If you had to replace a major appliance/car repair or replacement, or had to live a month off savings, being under £1000 would most likely wipe those savings out. It might be harsh, but £1000 isnt really that much.
Not at all surprised, just have a look at the job market for minimal experience jobs (even with degree). Your calculations later on are pretty much on point. But you drink less as a benefit?
That’s going to come down to circumstance a little bit. For example, it is literally as slow as walking for me to take a bus to work (4 miles), but cycling could be an option. Sky TV is definitely a luxury but at the lowest price (£20) would be a 4+ year sacrifice to save £1k. Or 83 years to save a £20k deposit for a home. Giving up Sky makes a good shout for a bad budget, but to help savings it’s medium-small potatoes. Just to play the devil’s advocate.
Is it? If you’ve got a Sky TV package alone with all the movie and sport bundles, it probably is. But if you’ve got a basic Sky TV package with bundled phone line and broadband, that may well work out as better value than having a BT phone line and a separate broadband provider, no?
I can’t imagine it is (surely not?)
I mean… I guess if you found a super expensive broadband deal, then sure.
But a cheap broadband deal and freeview would be the most cost effective way of doing it (or even still, watching everything on demand).
I’d say SKY was a luxury (on the whole).
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I wish. It was still +£18 for broadband, when you can get unlimited from EE for £21 (inc line rental). Broadband is damn competitive.
Fake news. I just put 22p in my piggy.
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Had a play with the MSE broadband/phone line/TV comparison tool.
Cheapest Sky option comes in at £35 effective monthly cost (for new customers).
Cheapest deal is with NowTV for £24 effectively monthly cost (for new customers).
Going for the cheapest saves £11 a month, or £132 over 12 months.
That’s not a huge difference. I could cover it by cutting out coffee, or not going to the pub quite so much.
A full Sky selection appears to be double the cheapest Sky option, and that would definitely be a luxury. But a basic one doesn’t seem wholly unreasonable.
Many with Freeview would probably want to complement it with Netflix or Amazon Prime, which would be another £6 to £8 a month. Almost on par with Sky.
If anyone can break things down differently and show that non-Sky options are significantly cheaper, I’d be very interested to see it!
huge if true 
I think this falls under the “what is a luxury” question - Something I’d imagine, we all see slightly differently.
If someone was flat broke, complained they had no money, and no ability to save - Would Sky be OK to have?
I’d say no - I’d also say Netflix and Amazon Prime etc, are also luxuries.
So when someone is “going through the books” and looking for places to save money, I’d say those little bits here and there which someone could reasonably live without - Would come under the “luxury” tag - That’s obviously my interpretation only - I’m sure others would see it differently.
I agree on the whole “I could save money elsewhere” thing - Take aways and eating out is a big one for a lot of people, and there are definitely ways we could all save money.
Just to be mega controversial.
Is broadband an essential or a luxury?
Granted that it would useful for managing your online accounts but you could always call your suppliers? I just use my broadband for gaming, online shopping and social media - I’d do without those if I was low on money or serious about saving. Especially when you’re quoting those monthly costs.
Every little bit helps!
Essential. Absolutely 100% essential lol.
To add to this hastily posted message.
Which did a survey a couple of years ago, and it was essential then as well - It’s becoming more and more essential as time goes on.
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In this day and age, yes. That or a mobile with data.
On the most basic of levels, people on JSA have to use a government site to show they are looking for work. If you’ve no access to the internet, you can’t do that.
Many other government services are increasingly moving online.
You could rely on computers provided by your local library, but if demand outstrips supply, or if the computers and/or internet connection aren’t working when you visit, you could find yourself in trouble.
Better to have your own independent access to the internet if you can.
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Of course it is a luxury.
My dog survives quite happily without it. He needs air, protection from harsh conditions, water and food. Humans survived hundreds of thousands of years with just that.
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Can’t tell if you are being sarcastic or not… 
I think we have to apply the “is it a luxury?” question to this day and age.
In the same way electricity is essential now, so is broadband.
I like this, some interesting points.
I have a few friends that don’t go online or use any social media etc. My parents don’t have broadband either and they haven’t fallen into a black hole of society. They get on just fine with everything.
This I can agree with. And it very much depends on just how cash-strapped the people in question are, and just how important some kind of life/leisure balance is to them.
I could save tons of money if I cut out all holidays, all books, the internet, TV, Blu-Rays, sweets and treats, alcohol, and anything but the most functional of furniture. But I’d probably be very, very unhappy as a result.
There is a balance to be had, and factoring in ‘luxuries’ is a part of that.
Obviously if you’re pressed for cash, like watching things, and have Sky, Netflix, Amazon Prime Video, and buy Blu-Rays, you’ve got the balance all wrong - just pick one! But allowing yourself one of them, if you can cover it from other areas, that’s OK.
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