Australians under the age of 35 are feeling the heat from rising living costs the most, forcing them to cut back on discretionary spending as many older consumers keep shopping, new data shows.

The Commbank iQ Cost of Living Insights report released on Wednesday crunched data from 7 million Commonwealth Bank customers. It reveals consumers in their early 30s are under the most financial pressure as inflation and interest rates continue to rise.

Analysis of the consumer data by the Commonwealth Bank and Quantium shows that year-on-year spending for people aged under 35 increased by just 3.4 per cent between the first quarter of 2022 and the first quarter of 2023 – below the inflation figure of 7 per cent.

Under 35s cut their spending on clothing, shoes and accessories by 8.4 per cent in the first quarter of 2023, while expenditure on retail services, such as haircuts and beauty treatments, dropped by 0.6 per cent.

Over the same time period, consumers aged over 35 increased their apparel spending by 3.5 per cent, while their retail services spending jumped by 9.7 per cent.

Consumers aged older than 55 also posted year-on-year increases in their overall spending of 7.7 per cent, tracking above inflation.

CommBank iQ head of innovation and analytics Wade Tubman said that, while many young Australians between 18 and 24 had the benefit of living at home, housing costs were putting pressure on consumers in their late 20s and early 30s.

“Renters are experiencing significant pressure. Rents are increasing by some of the highest amounts they have in some time,” he said.