Younger generations are not planning to have children as it is seen as unaffordable, new research shows.
The cost of living crisis is preventing many young people, particularly Generation Z, from starting families, according to credit broker, Cash Lady.
Nearly half of childless 18 to 24 year olds said they don’t plan on having any children in the future, with 50 per cent fearing they’ll never be financially secure enough to start a family.
Additionally, the environmental impact of having children and responsibility involved weighed on youngster’s thoughts.
Paul Wilson, personal finance expert at Cash Lady, said: “The fact that most young people have numerous financial concerns about having children, many of which are putting them off the idea entirely, is a real shame.
“The cost of living, particularly for renters, is higher than ever, so it’s no surprise that Gen-Z don’t feel that they can fund a little one when it’s a struggle to fund themselves in the current landscape as it is.”
‘I wouldn’t sacrifice my financial freedom’
Emma Malcolmson, 23, a digital public relations executive, is one such person who doesn’t plan on having children soon.
She said: “I’m not particularly set in ruling out having kids at some point, but at the moment, it feels like a pretty unlikely option for me. It probably would mostly be due to financial freedom reasons for me.
“With everything that’s going on in our current climate: cost-of-living, falling living standards, constantly rising pension age, I don’t think I’d be willing to sacrifice my own financial freedom to raise a child.”
Emma, who lives with her parents, added she has many friends with babies who have struggled with a lack of financial support for their maternity leave.
Rising property prices are also a big concern.
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She said: “[A worry] for myself, and probably Gen Z as a whole, is probably property prices.
“When I come to move out, which I’m looking to do in the next year or so, it’s not going to be the case where I can afford more than one bedroom.
“People can’t afford spaces big enough to raise full families.”
As some of Emma’s friends starting having children, she admitted she had been quite naïve in just how expensive they could be.
She said: “For some people it would be half their salary just to actually have their kids looked after while they go to work.
“The childcare would be a huge thing and decades ago, one parent could work while the other stayed at home and looked after the kids without having to pay the costs, but that’s just totally not feasible now.
“To survive comfortably, realistically both parents need to have full time jobs.”
What declining birth rates will mean for you
In terms of what she believes needs to change in order to encourage Gen Z to start families, Emma said the focus should be on government support.
She said a “complete overhaul” of child benefit and maternity pay is needed to ensure parents can comfortably raise children, and not be forced to work at full capacity just to get by.
Helping younger generations start families may prove to be crucial as declining birth rates are set to have an impact on the wider economy.
Romi Savova, chief executive officer of PensionBee, said: “Declining birth and fertility rates spells an uncertain future for the next generation of retirees, as a smaller number of working taxpayers will be required to shoulder the burden of supporting an ageing population.
“To account for this change, the government may be forced to raise existing taxes or even create new ones.
“The introduction of the Health and Social Care Levy, for those over the state pension age who continue to be in paid employment, is perhaps the first of many government measures which will see the older population asked to directly contribute to funding increased health and social care expenditure.”
Ms Savova added more drastic measures could see the benefits available in retirement cut for future pensioners.
This may include cutting the value of state pensions and/or increasing the age at which they can be claimed.
Finn Houlihan, managing director at the wealth management firm Arlo Group, also said the government could raise certain taxes.
He said: “There are currently massive drains on government purses, and while the government may be forced to raise taxes in the future, it can’t just keep raising income tax and national insurance.
“Therefore, they may look to increase inheritance tax – this was increased after World War Two to 80 per cent in order to recover after the war effort.
“Equally, they could look to develop a wealth tax based on people’s higher value properties, for example, those over £1million.”
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