Gen X the cohort most squeezed by cost-of-living crisis, according to survey
![Generation X are most likely to be impacted by the current cost-of-living crisis.](https://images.thenightly.com.au/publication/C-15474262/efe830569455b5d4c381e31cdd82723fe6276106-16x9-x0y129w3425h1927.jpg?imwidth=810)
Generation X is the cohort most squeezed by rising cost-of-living pressures and are likely to have less savings in the bank than Baby Boomers or Millennials.
A new survey from comparison service InfoChoice has laid bare the different spending and saving habits of generations, with the results showing that one in five members of Generation Z are happy to fork out for body modifications, including lip fillers.
Baby Boomers are more likely to be financially comfortable with about a third having more than $100,000 in the bank and almost half owning their homes outright and having no debt, according to the survey of 1000 Australians.
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By continuing you agree to our Terms and Privacy Policy.Those born between 1946 and 1964 were the least likely to have reduced spending in the current cost-of-living crisis, with 53 per cent reporting their spending habits had not changed in the past 12 months.
In comparison, about 45 per cent of Generation X and 48 per cent of Millennials report cutting back on spending over the past year.
InfoChoice analyst Harrison Astbury said Australians born between 1965 and 1980 were saddled with mortgages and potentially looking after elderly parents as well as older children in high school or entering university.
“I think for Generation X they are really caught between rock and hard place,” said Mr Astbury.
“It’s a really stark reminder that the cost of living crisis could hit them worse.”
The Reserve Bank has raised interest rates 13 times since May 2022, with the official cash rate now at 4.35 per cent.
Meanwhile, the Consumer Price Index has risen four per cent in the 12 months up to May 2024, a situation driven by the increasing costs of housing, food and beverages, transport and alcohol and tobacco.
AMP chief economist Shane Oliver said all generations had likely been impacted by the CPI rise. However, the increasing costs of servicing a mortgage were likely to hit Generation X and Millennials harder, particularly compared to Baby Boomers.
“The kids are off their (Baby Boomers) hands and they’ve got plenty of spare cash flow and most tend to have their mortgages under control,” he said.
“If anything they might be benefiting from higher interest rates on bank deposits.”
The InfoChoice survey found nearly 90 per cent of Australians had cut back on eating and drinking out and 72 per cent had reduced spending on hobbies and recreational activities.
Conversely, about 76 per cent said they were spending more on groceries and 54 per cent said their utility costs had increased.
Alcohol remains the most popular vice among all Australians with 71.6 per cent reporting they continued to spend money on liquor followed by fast food, 62 per cent, smoking and vaping, 24.9 per cent, and gambling, 22.9 per cent.
Boomers spent the most on alcohol, 77.3 per cent, while more than three quarters of Generation Z treated themselves to fast food.
One in five members of the generation born between 1997 and 2012 reported spending money on body modifications such as tattoos and plastic surgery.
Mr Ashbury said the body modification spending was likely driven by pressures to conform to beauty standards, with women three times more likely than men to spend on enhancing their appearance.
“I think it’s just a sign of the times,” he said.
About 45 per cent of Generation Z had not changed their spending habits, with about two-thirds still living with their family rent free.
The InfoChoice survey found less than half of all Australians had less than three months savings in the bank and 55 per cent have some kind of debt.
NSW residents are the most indebted with more than a quarter owing more than $500,000.
Conversely, Victoria is the least indebted state with 45.8 per cent debt-free followed by South Australia, 39.1 per cent and Queensland, 37.4 per cent.