While rising costs of living have been globally observed, with inflation rates soaring to new highs in major economies, less-considered is the impact these costs have on migrants around the world who are often charged with financially supporting loved ones overseas.
WorldRemit conducted a multi-country study to determine the effects of the increased cost of living on migrants in the US, UK and Australia. The company connected with 1 000 international remittance senders in each country, of which 20% are first-generation migrants living in these countries, with the remaining notably born in either the US, UK or Australia. While there were minor differences, broadly speaking,first generation migrants’ views were aligned with those of the overall sample in the survey.
Since the beginning of the year, 78% of respondents agreed that their cost of living has increased, with the most impacted areas seen across utility costs (82%), transport (77%), daily living (84%), housing (64%) and healthcare expenses (54%).
Inflation affects both senders and receivers of remittances around the world. Respondents noted they directly feel the impact of rising costs of living, and also noted that their loved ones back home share the same sentiment.
Globally, the main reason people cited they send money to loved ones overseas is for day-to-day expenses (such as food, transportation, clothing), accounting for more than half of all money sent overseas (53%), followed by one-off expenses, like travel (40%).
With increasing financial pressure, the ability to support unexpected expenses is likely to increase the pressure that remittance senders already feel supporting recurring, regular expenses. Despite this, the WorldBank still expects global remittance flows to increase by 4,2% throughout 2022 and reach $630-billion.
In a testament to their resilience, migrants around the world actively conserve daily spending in order to sustain their ability to send money home to support loved ones, reporting they eat out less (49%), save on day-to-day expenses (46%), limit social gatherings to save money (28%), and opt for public transportation rather than driving themselves (25%) since costs have begun to rise.
“Migrants’ resilience and commitment to their loved ones back home has proven to be vital, especially in a period where household expenses are increasing around the world,” says Jorge Godinez Reyes, head of the Americas at WorldRemit. “This latest study proves that even during times of financial instability, many migrants are making conscious adjustments to their daily lives to maintain the regular flow of remittances to families and loved ones back home.”
As the world adjusts to increased global inflation, more than half (52%) of respondents agree that they now send money abroad to fewer people as a result of the increased cost of living, with 72% now only sending to close family. Additionally, 75% of respondents said the cost of living for those they send money to has also increased since the start of the year.
What’s notable about the additional financial stress is that respondents also reported that across the key reasons they send for, the amount they’ve sent has often maintained or increased since they began feeling the impact of inflation.
Since the onset of higher inflation levels, 60% of Americans and 57% of Australians who send money for healthcare report increasing the amount sent, while only 36% of Britons reported an increase. For those who send for education, 83% of Americans, 81% of Australians, and 62% of Britons reported maintaining or increasing the amount sent. For those who support loved ones’ rent, mortgage or utility bills, 79% of Americans and Australians, and 69% of Britons reported maintaining or increasing the amount sent.
More than 244-million people worldwide are classified as migrants, with 14,4% in the US, 9% in the UK, and nearly half of the population in Australia classified as migrants (48%). With global inflation showing no signs of slowing, financial preparation and planning is essential to ensuring migrants and their families can continue to make ends meet.