UK millennials have suffered a significant decline in living standard improvements compared with the previous generation, setting them apart from most other developed countries, according to research from the Resolution Foundation think-tank.
In a report published last month, the think-tank looked at how incomes, employment and home ownership rates have changed from one generation to the next since the second world war in nine advanced economies, including the UK.
They found that millennials in most of the countries studied have done scarcely better — and in many cases have fared worse — than the generation before.
In the UK, millennials — those born since 1981 — saw a deterioration in most measures of living standards following a long postwar period in which each generation enjoyed significantly better living standards than the one before.
In other high-income countries, such as Germany and the US, previous progress had been slower. In Scandinavian countries, the turnround for millennials has been less dramatic.
“This ‘having it’ then ‘losing it’ generational story has only taken place in a small number of countries,” said Daniel Tomlinson of the Resolution Foundation. “It is only in the UK in which it is clearly evident in relation to both incomes and housing.”
Opinion polls show Britons are largely pessimistic about younger generations’ economic prospects. Half of respondents to a poll conducted by Ipsos in late 2016 said they thought today’s youth would fare worse than their parents, compared to 22% who thought young people would fare better.
In the same Ipsos poll, which surveyed people in more than 20 countries, only four — France, Belgium, Spain and South Korea — had a higher fraction of respondents saying the prospects for young people were worse.
According to the Resolution Foundation, “Generation X” — those born in the UK between 1966 and 1980 — enjoyed incomes in their early 30s that were 54% higher in real terms, on average, than those of the “baby boomers” born between 1946 and 1965 at the same age.
But the think-tank found that for millennials, progress has slowed. Their income in their early-30s has been just 6% higher, on average, than that of Generation X.
Millennials in the UK have also fared less well than their predecessors in the housing market. Only one-third of millennials own their home in their late-20s, compared to 52% of Generation X and 60% of baby boomers, according to the Resolution Foundation.
The think-tank also found that the decline in the home ownership rates for the millennials had been larger in the UK than in the US, Spain or Australia.
The Ipsos survey suggested that respondents in all four countries were worried about young people’s prospects for getting on the housing ladder. But the concerns were most pronounced in the UK, where just 11% of respondents said they thought young people would be better able than their parents to a buy a home, compared to 77% who thought they would be less able.
“Britain may have avoided the shocking levels of youth unemployment seen in southern Europe, but it’s still a long way off providing the progress for young families that they and their parents had come to expect,” said Mr Tomlinson.