Thursday, September 29, 2016

Poorer than before

Children of Thatcher era have half the wealth of the previous generation. People born in the early 1980s are the first post-war generation to reach their thirties with smaller incomes than those born a decade earlier. Amid the broader stagnation of working-age incomes, the deep recession that followed the 2008 crash had a major impact – hitting the pay and employment of young adults harder than anyone else’s.

The report from the Institute of Fiscal Studies concludes people born in the early 1980s are the first post-war generation to suffer smaller incomes in early adulthood than those born 10 years before, half as much wealth as the previous generation. The report sets out in intricate detail how people born in the early 1980s, as Margaret Thatcher set about transforming the British economy, have median net household wealth of £27,000 per adult, including housing, financial and private pension wealth. Yet this is about half of the £53,000 that those born in the 1970s had at the same age.

IFS research economist and the report’s author Andrew Hood said: “By the time they hit their early thirties, 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.” 

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