Cost of Living Squeeze: UK workers under £40K say they can't afford kids
Estimated read time: 5 mins
New data from the Vanquis Financial Wellbeing Index reveals the full impact of the ongoing cost-of-living squeeze on UK workers earning up to £40,000 – “The Heart of Working Britain”.
This shows that these Brits lack the confidence to have kids or grow their families, with many taking on second jobs, and cutting back on non-essentials to cope financially.
The quarterly report draws on two complementary datasets, providing a quantitative and qualitative view of the financial wellbeing of this group. This includes anonymised, transaction-level spending data from money management app, Snoop, complemented by consumer research from Mintel, which explores attitudes, confidence, and financial sentiment.
Key findings from the report show:
- Only 14% of householders earning under £40,000 feel confident in their ability to afford having a child or expanding their family.
- Only 26% feel confident in being able to take two months off with no pay, and only 21% could handle a £200 increase in mortgage or rent payments.
- 37% of this group report working more hours, 33% have taken second jobs, 73% are cutting back on non-essentials.
- 41% of UK householders earning under £40,000 say their mental wellbeing is impacted by their financial situation.
Persistent bill pressure
Rising bills may be contributing to these money worries, with essential spending for this group rising steadily over both the short and long term. Data shows water bills have risen by 10% over Q3 2025 and 48% over the two-year period up till October 2025, with the Government yet to rule out bigger rises down the line.
In addition, spending on insurance premiums, mortgage and rent, and groceries have all risen by over 10% over a two-year period. Energy bills are the only essential spending item that has seen relative stability, remaining flat over the two-year period, with a recent 4% QoQ decline.
Low savings rates, despite healthy headroom
Despite these persistent cost pressures, the Heart of Working Britain do have a financial buffer of 11% at the end of each monthi (down from 12% last quarter, but up from 9% YOY), thanks to income mostly keeping pace with a rise in spending levels.
However, individual’s savings rates are low, at only 1.81% a month (up from 1.48%), slowing progress on building financial resilience and likely leading to the low levels of confidence seen in the data.
Ian McLaughlin, CEO of Vanquis Bank said: “This new data from the Vanquis Financial Wellbeing Index shows that the ongoing cost-of-living squeeze is taking its toll on hard-working Brits, with rising bills eroding financial confidence and creating uncertainty about the future. This is impacting key life decisions, such as the choice to have children or grow their families, and driving many workers to take on second jobs or make sacrifices in their spending.”
“While some workers may finish the month with financial headroom, much of it isn’t being saved. This preserves short-term flexibility but prevents long-term resilience. Simple saving habits – even modest, regular amounts – are crucial for building confidence and establishing lasting financial wellbeing.”
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Note to Editors:
About Vanquis
- Vanquis is the UK’s largest specialist finance provider for financially underserved customers and one of the biggest financial services businesses outside the Southeast.
- Headquartered in Bradford and listed on the London Stock Exchange, Vanquis serves 1.69 million customers through core banking services and Snoop, a platform that helps individuals save up to £1,500 annually on spending and household bills.
- Committed to financial inclusion and social mobility, Vanquis provides tailored products and services that empower customers to take control of their financial futures. This aligns with our mission: to deliver caring banking so our customers can make the most of life’s opportunities.
About the Vanquis Financial Wellbeing Index
- The Vanquis Financial Wellbeing Index tracks the financial realities of the Heart of Working Britain – those earning up to £40,000 a year. Using anonymised spending data from Snoop and consumer sentiment insights from Mintel, it maps how households are earning, spending, saving, and feeling in 2025.
About the Data
- Data Source: Snoop / SpendMapper
- Data: The analysis is based on anonymised transactional data from a stable cohort of 2,887 people, covering a two-year period from Q3 2023 to Q3 2025. The data reflects consistent transaction and income history over this time frame. Within this broader cohort, a focused subset of 1,404 participants earning up to £40,000 annually provides targeted insights into the financial behaviours and pressures faced by lower- to moderate-income earners.
- Mintel: Consumer Financial Wellbeing Survey on behalf of Vanquis – 2025
- Fieldwork dates: 12 September – 24 September 2025
- Source: Kantar Profiles/Mintel
- Market: Great Britain
- Base: 1000 internet users aged 16+
- 559 earning less than £40k pa
- 388 earning more than £40k pa
- 53 preferred not to disclose earnings
i Surplus = income – bills / spending