Generation X Revealed as the Nation’s Biggest Spenders

Generation X, those caught in the middle between the so-called Millennials and Baby Boomers, have the largest weekly spend compared to any other generations, totalling £525 each week – £87 more than Millennials and £61 more than the UK average.

The findings come from Fidelity International’s Generational Price Index (GPI), which analyses how inflation as measured by the consumer price index impacts the spending habits of different generations. The latest numbers show that while Gen-Xers have the highest spend, average weekly spending is up for all generations with inflation now at 2.3% – the highest since September 2013.

Generation X spend 15% of their weekly spend on transport, which include rail, road and air fares – more than they spend on food and housing costs.

Maike Currie, investment director for personal investing at Fidelity International, comments: “Many Gen X’ers form part of the so-called ‘Sandwich generation’ – a demographical group torn between the twin pressures of caring for elderly parents and children. Given the raft of responsibilities faced by this generation it is unsurprising that their weekly expenses outpace that of any other generation.”

Travel expenses, air fares and package holidays top the weekly spending charts for most generations, a trend we expect to see continuing as a weaker pound pushes up the cost of travelling abroad.

Fidelity reveals top five weekly spending expenses by generation:

Source: Fidelity International / Europe Economics

As the average age of ‘the first time buyer’ creeps higher, a larger slice of the younger generations are spending their money on rent. Rent and related housing costs  are another big drain on Gen-Xers, however, this generation still spends far less than Millennials who put  almost a quarter of their income towards rent and household bills (22%).

Image 1 – Fidelity reveals how each generation spends its money:

Source: Fidelity International / Europe Economics

Maike Currie said: “As the new tax year approaches, many people are thinking of ways to improve their personal spending, particularly as life is set to get more expensive. With rising food and fuel prices pushing inflation to its highest level in more than three years, the spending pressures are mounting for all generations.

“Higher inflation has implications not just on the everyday cost of living but also on our savings and investments as a low interest rate and rising inflationary environment is a toxic combination for people. As inflation erodes the value of the money in our pockets, we are left with less to save. Any savings kept in cash on near-zero rates will be worth less now than they were 12 months ago. With inflation rising and wage growth slowing, our savings need to work harder. 

“Rather than leaving cash languishing in the bank, consider investing in the stock market as a route to generating higher returns. Equities, for example, can perform well in the early stages of inflation. History shows there has been a sweet spot in the inflation range that suits equities well – normally at around 2% to 2.5%. Equally, if you want to add some inflation protection to your portfolio, have a look at funds tapping into assets such as gold, agriculture and property – all good protectors against the wealth-eroding effects of inflation.”