25-49 year-olds set to be hardest hit in budget

Almost 60% of people aged between 25 and 49 have either lost their jobs, had their hours reduced or had a cut in salary during the recession — and look set to be hardest hit once again in the upcoming budget.

The hit being taken by this group could drastically affect the country’s chances of dragging itself out of the economic doldrums.

The company behind the latest data, Behaviour & Attitudes, said 25 to 49-year-olds are seen as the “consumer engine” generating the greatest spend in the domestic economy.

B&A said recessionary effects will continue for longer if those key sections of society do not see a resurgence in spending power.

Nonetheless, economists believe they, as the main earning and spending age group in the economy, will be targeted even further in October’s budget.

B&A surveyed 1,003 people across the economic spectrum, asking how the recession had impacted on their household income and spending ability.

Of the 25 to 34-year-olds questioned, 60% said either they or their spouse had suffered a loss of income — 38% through loss of job, 43% through wage reduction and 36% through a cut in hours.

It was a similar picture in the 35-49 age bracket, in which 57% reported a loss of income in the household — 26% said a job had been lost, 47% said pay had been cut and 31% said fewer hours were on offer.

The recessionary impact reported by the other age groups was far lower. In the under-24 bracket only 24% said they or their partner had suffered a loss of income through job loss, pay cut or cut in hours. Among 50 to 64-year-olds it was 42% and for over 65s it was just 8%.

The B&A survey also detailed where people had sought to cut costs in recent years. It found 66% were socialising less and 46% were not booking any holidays.

Overall 63% of those surveyed were struggling to make ends meet and 33% admitted they were finding it hard to make loan and mortgage repayments.

Larry Ryan, director of B&A, said: “The two middle-aged bands between 25 and 50 are really badly impacted because many have property debt and particularly as their earnings were reduced through job loss/hours loss etc.

“The effect of this is significant. If these are the conventional consumer engine it will have a longer term impact that these people are so badly off.”

Nonetheless Mr Ryan said the survey’s authors believed people had started to come to terms with their new circumstances and are “smarting” less than previously.

However, economist Brian Lucey said that while anything that pushes the domestic economy down is damaging, “the problem is that we still have a big hole in the bucket so we need to fill that”.