As inflation and import costs have risen, shoppers have been hit with bigger bills when… Read more »
Thirty-something’s wealth halved over course of the last decade
Over the last decade, the wealth of those in their thirties is half of what those now in their forties had at the same age. The new research by the Institute for Fiscal Studies found that the 30-something’s of today have missed out on a return for their investment through the house price increases and better pension schemes.
Those born in the early 1970’s had an average wealth of £53,000 while those born in the early 1980’s have an average wealth of £27,000. This big disparity in wealth over the years is made even worse when it is coupled with the news that it will be harder to amass wealth in the future.
This early 1980’s generation is the first post-war group that doesn’t have higher incomes than the one that came before them. The report goes into further detail about these findings stating; “This is partly the result of the overall stagnation of working-age incomes… But it also reflects the fact that the great recession hit the pay and employment of young adults the hardest.”
The recession hit just as those born in the mid and late 1980’s entered the job market which made the beginning of their adult working career difficult. We are in the recovery stage currently but difficult economic circumstances and uncertainty has made it difficult for those in their 20’s and 30’s to save or build up any wealth in housing and pensions.
The rise of debt for young people, lack of affordable housing and the inability to save means that any wealth other generations had saved in property, savings and investments has not been viable for a larger majority of this current generation of 30-something’s.
Chief executive of housing charity Shelter, Campbell Robb, commented on these new findings; “With sky-high house prices so out of step with average wages, it’s no wonder a whole generation are being priced out of a home of their own… we see the impact of our chronic shortage of affordable homes every day, with thousands… forking out most of their income on rent and left living from one pay cheque to the next.”
The problem is something that is expected to become even worse in around 40 years’ time when those in their 30’s enter retirement age. A higher proportion of renting pensioners is likely to put a higher cost on the state to support them through benefits, such as housing benefit.
We do not know if the long term impacts of this that have been predicted will come true but this is worrying news for policy makers as we are seeing the first post war generation to be less well off than those who came before.