Image credit: “4 Generations”, Mark Evans, Flickr
New research has found that despite all the mod cons of the 21st Century, if you were born in the 1960s or 1970s, you’re unlikely to be any better off in retirement than your parents. The report by The Institute for Fiscal Studies, funded by the Joseph Rowntree Foundation found that if you fall in this age bracket, you:
- have no higher take-home income;
- have saved no more of their previous take-home income;
- are less likely to own a home;
- probably have lower private pension wealth;
- will tend to find that their state pensions replace a smaller proportion of previous earnings.
The research also found that:
- Since the Second World War, successive generations have generally experienced higher incomes and higher living standards than the previous generation, as they have benefited from rising national income.
- This has stalled over the last decade. Working-age adults do not currently have higher incomes (after adjusting for inflation) than their predecessors born 10 years earlier had at the same age (e.g. 40-year-olds now have no higher incomes than 40-year-olds a decade ago).
- Those born in the 1960s and 1970s did have higher incomes during early adulthood than their predecessors. But this additional income at younger ages relative to earlier generations was all spent: they have not saved any more past income than their predecessors had by the same stage in life.
It also found that people born in the 1960s and 1970s are taking longer than their predecessors to get on the housing ladder, and their homeownership rate has stalled over the last few years at around two-thirds – far below the four-fifths rate at which it peaked for those born in the 1940s and 1950s.
So we’re poorer, not richer than our parents!
Do you agree, and if so, why do you think that is?