Young people will be poorer than their parents at every stage of life, according to a report.
The Institute of Fiscal Studies (IFS) looked at the evolution in household’s wealth between 2006 to 2008 and 2010 to 2012 to find that young people today are more financially insecure than previous generations.
While the average financial wealth for the 45-54 age group grew to £6,000, their younger 25 to 34 years old counterparts revenue increase was of only £4,000.
The difference was even bigger when looking at pension income where wealth increased by £13,000 for the 25 to 34 age group compared to £38,000 for the 45 to 54 age group.
Working-age families are wealthier on average, despite the financial crisis over the late 2000s, due to pensions increasing in value over the period.
“Even with these increases in average wealth, working-age households are at risk of being less wealthy at each age than those born a decade earlier,” said Dave Innes, a Research Economist at the IFS.
Millennials do not see things improving in the near future. Nearly one quarter do not expect to receive any income from the state pension in retirement, while nearly half do not expect to receive any income from a private pension.
Ironically, 28 per cent expect an inheritance to provide them with some resources for their retirement.
“It is striking how many individuals do not expect private pensions to have a role in financing their retirement, let alone be their main source of income. It will be interesting to see how these attitudes change as auto enrolment into workplace pensions is rolled out,” said Rowena Crawfor, a Senior Research Economist at the IFS.
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