Yorkshire Building Society has warned of the detrimental long-term economic impact of the cost-of-living crisis as it finds that 70% of young people plan to cut spending on non-essential items to make ends meet – and as prices continue to rise the mutual has called for support for businesses, as well as individuals.

According to the society’s Inflation Nation report, which asked 4000 adults across the UK a series of questions around their ability to cope with the cost-of-living crisis, 24% of Britons across all age groups plan to cut back on non-essential items, including leisure activities, inessential clothing, trips to restaurants, holidays and trips to the pub, by £50-99 a month, while 19% plan to do so by £100-199.

As well as being the group most likely to cut back on spending, young people, those under the age of 40, were also considerably more likely to cut back by more than their older counterparts – with 23% saying they would reduce monthly outgoings on non-essential items by £100-199, and 14% saying they would do so by as much as £499.

The society warns that whilst cost-cutting where possible will be essential to people’s ability to navigate the cost-of-living crisis, businesses recovering after the blow dealt by the pandemic will likely suffer as a result, in many cases, costing people their jobs and livelihoods. Particularly vulnerable sectors, such as leisure and hospitality, which employ many young people, are most at risk.

Under-40s were also the group most worried about the impact the cost of living will have (72%). Tax rises (33%), ability to save going forwards (28%) and job security (18%) were all greater concerns for those under 40s than older generations.

Nitesh Patel, strategic economist at Yorkshire Building Society, said: “With the cost of living increasing, people are doing the sensible thing and looking at their finances and assessing where they can save – and no group more so than the young.

“For most, this means cutting back on things that, whilst they enjoy, they feel they can do without. This includes going out for dinner, going to the pub with friends, leisure activities, buying clothes you don’t necessarily need and holidays.

“Cutting back on non-essential spending is something that people could do in order to navigate the coming months – and even years. Indeed, as inflation approaches double figures, it is showing no sign of abating any time soon. And to make matters worse many people are seeing their earnings grow by less than inflation.

“Reducing spending where they can will ensure that young people can not only cover their costs, but, also support them to stay on track and meet major life milestones. We know from our research, for example, that almost a third (29%) of those under 40 say living costs are becoming the biggest barrier to saving for a deposit to buy their first home.

“Cutting back culture and leisure activities, however, comes at a price to the economy in what is somewhat of a vicious circle. If people are not spending, businesses cannot survive. Taken to the extreme, this could be closures and job losses – especially for those businesses still recovering in the aftermath of the pandemic.

“Business, as well as people, are going to need considerable support to see them through what is undoubtedly going to be a very difficult period.”