Reduced home ownership, pensions benefits and wage stagnation have all hit the 1980s cohort hard
People in their early thirties are the first post-war cohort not to enjoy higher incomes than those born in the previous decade, new research from the IFS shows.
The median net household wealth of people born in the 1980s is £27,000 per person, whereas those born in the ’70s had median wealth of £53,000 at the same age.
The disparity can be attributed to lower rates of home ownership, reduced access to defined benefits pensions, and the fact that young people’s jobs and income were hit especially hard by the great recession.
IFS economist and report author Andrew Hood commented:
“By the time they hit their early 30s, those born in the early 1980s had about half as much wealth as those born in the 1970s did at the same age.
Sharp falls in home-ownership rates and in access to generous company pension schemes, alongside historically low interest rates, will make it much harder for today’s young adults to build up wealth in future than it was for previous generations.”
The research also shows that in their late 20s, renters in this cohort paid significantly more in housing costs than those with mortgages.
This is a new phenomenon, which drains the incomes and reduces the living standards of renters, as well as preventing saving and shutting them out of the housing market in the longer term. In fact, home ownership rates among people born in the 1980s are closer to the rates of those born in the 1930s than to any cohort in between.
This generational divide was one of the injustices that the prime minister pledged to fight in her first speech from the steps of Downing Street, pointing out that ‘if you’re young, you’ll find it harder than ever before to own your own home’.
This report demonstrates that realising that promise will require coordinated reforms in a range of policy areas, including expanding access to housing, reversing wage stagnation and improving the conditions and employment prospects of young workers.
3 Responses to “We’re going backwards: ’80s kids are half as wealthy as those born in the ’70s”
CR
The UK’s low wages, high rents and excess demand for public services are all directly resulting from our uncontrolled immigration.
NB
No it isn’t immigration, we’ve had fairly standard levels of immigration with just small rises. There are numerous studies showing that immigration is not responsible. But don’t let the truth get in the way of your opinion.
The housing bubble, no rises in wages and reduction of public services are all hitting us hard.
Tom Wintringham
New Labour fiscal conservatism of Tony Blair and Gordon Brown to blame.
Fiscal conservatism from Tories who tank the economy is par for the course – fixable if Labour grows the economy recently shrunk by the Tories.
The real treachery was fiscal conservatism from the Labour Party.
Blair appointed Brown as his chancellor who aped Tory fiscal conservatism, promising to be “prudent”, balancing the books over the cycle and other fiscal conservative guff.
So the ruination of the British economy, the rise of the Scottish national party in response to austerity and the disintegration of Britain as a global power as China rose to super power status is really only the direct fault of THE GREAT CLUNKING FIST OF GORDON BABOON and those little monkeys who supported that great ape.