February 2, 2023

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Inflation is forcing migrants to reduce their remittances

WORLDREMIT Group Ltd., a leading digital remittance company, announced the results of its second Cost of Living Index, in which the organization sought to understand how the deepening crisis of inflation has impacted the lives of international money senders around the world.

The poll found that 82 percent of remittance senders agreed the cost of living for the people they send money to has increased since the beginning of the year.

Highlighting the impact of inflation on people around the world, almost half (45 percent) said they now only send money to their immediate family rather than to friends and distant relatives. 1 in 9 people worldwide rely on money from friends and family who have migrated abroad to work. With several factors contributing to increased financial pressures, new data shows that 72 percent of respondents in the US, 41 percent in Australia and 44 percent in the UK have taken up a part-time job (a job on top of their main source of income). with an average of 27 percent of respondents across our three markets saying they have done so to support their own cost of living increases.

Of those surveyed who reported side hustles, 89 percent said they would keep their side hustle for the next 12 months.

Households around the world will reconsider their spending habits in the face of inflation, with more than a quarter of respondents (26 percent) saying they limit voluntary spending on entertainment such as eating out or going to the cinema or theater. In the UK, for example, nearly two-thirds (65%) of respondents expressed concerns about the cost of electricity bills, pointing to the changing spending habits of UK households as a result of the energy crisis.

“The inventive solutions, such as side hustles, that we are seeing resulting from the current economic landscape indicate the resilience of migrants and their commitment to financially support loved ones abroad,” said Jorge Godinez Reyes, Head of the Americas, WorldRemit. “These results demonstrate the determination of economic migrants to adapt to greater financial pressures and the rising cost of living while meeting the needs of their families at home and abroad.”

The cross-country study was conducted in October 2022 to determine the ongoing impact of increased living costs on international money senders in the United States, United Kingdom and Australia, resulting in observations of 2,687 international remittance senders. Although there were minor differences, the views of first-generation migrants were broadly consistent with those of the overall sample in our survey.

methodology

International money senders aged 18+ living in the US, Australia and the UK voluntarily took part in a 13-question survey on how the cost of living and inflation changed behavior when sending remittances between October 26, 2022 and November 1, 2022.

The survey took place on the Attest platform and resulted in 2,687 responses from people who had sent remittances in the past year (those who responded that they had not sent remittances in the past year were excluded from the survey to ensure a viable to create a participant base).

No quotas (e.g. gender, age) were set for this survey, so the results are not intended to be nationally representative.