Households with an average income of less than £40,000 say they can’t afford to have children as they grapple with higher costs.
Only 14 per cent of individuals earning under £40,000 say they feel confident they could afford another child, compared to 30 per cent of higher earners.
Three-quarters say they could not afford two months off work without pay.
That is according to Vanquis Bank’s Wellbeing Index, which says financial resilience among lower-income households is limited and reveals heightened strain around life events and potential income shocks.
Those earning less than £40,000 are twice as likely to describe their financial situation as ‘tight’ or ‘struggling’ compared to higher earners, according to Vanquis.
Cost of living crisis: Lower earners say they can’t afford to have children
Ian McLaughlin, chief executive of Vanquis Bank said: ‘The ongoing cost-of-living squeeze is taking its toll on hard-working Britons, 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.’
To cope with rising bills, a third of people earning under £40,000 say they have taken on second jobs, while three-quarters are cutting back on non-essential spending.
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Essential spending in the third quarter of 2025 has stabilised after a period of steady increases, the study showed, although it is 6 per cent higher year-on-year and up 12 per cent over two years.
Water bills have seen the biggest increase (48 per cent), followed by insurance premiums, which are up 15 per cent over the past two years.
Energy bills have remained flat over two years, although costs remain close to a historic high.
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Groceries are up 12 per cent over two years. Among households earning up to £40,000, 60 per cent are switching to own-label groceries (down from 62 per cent), while 59 per cent are moving to cheaper supermarkets (down from 61 per cent).
The most recent inflation reading showed food prices were up 4.5 per cent in September, down from 5.1 per cent the previous month, led by discounting at supermarkets.
Despite this, money worries remain. Those earning less than £40,000 said they had just 11 per cent of their income left after bills and essential spending in the third quarter, down from 12 per cent in the same period in 2023.
Of this, they said they put 1.81 per cent of their income into savings, up from 1.48 per cent.
Half of households earning under £40,000 say they cannot save or reduce debt, while higher earners are strengthening their finances, helped by more frequent pay rises and additional income streams.
McLaughlin added: ‘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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People earning less than £40,000 say they can’t afford to have more children