Millennials warned to plan ahead as intergenerational wealth gap widens
8 November, 2017
Britain’s younger generations are likely to get left behind due to debt and high house prices creating an inequality of wealth, according to a new report.
The Institute for Public Policy Research (IPPR) has found that the poorest half of the country has an average household wealth of just £3,200 in net finances, property and pensions.
Commissioned by Channel 5, the report revealed that fewer than half of millennials (those born between 1981 and 2000) are expected to own their own home by the age of 45, while debt amongst this group is also rising.
A separate study recently conducted by the Financial Conduct Authority (FCA) found that 25-34-year-olds have above-average debts, despite making up only 18 per cent of all UK adults. On top of this one-fifth of 25-34-year-olds have no savings and a further third have less than £1,000.
According to the IPPR, “every generation since the post-war baby boomers has accumulated less wealth than the generation before them had at the same age.
“The next generation is set to have less wealth, largely due to housing inequalities.”
Home ownership has been falling across all age groups since the mid-2000s and is at its lowest in nearly 30 years, but for 25-34-year-olds, it has fallen from 59 per cent in 2003 to 37 per cent in 2015.
This makes it “increasingly hard” for younger Britons to share in the UK’s wealth, according to the report, unless they have “substantial” support from family.
The think-tank is calling on the Government to take action over the generational wealth gap as part of a radical rethink of economic policy for ‘post-Brexit Britain’, but experts also agree that it is down to individuals to review their savings to ensure they are financially secure.