Young workers may endure ‘lifetime of lower wages’, claims new report

The report found that while salaries of the “baby boomer” generation have risen, young people have been the biggest “victims” of the cost-of-living crisis, due to rising rents, energy and transport costs. The research also claims that the gap between the wages of those under 21 and the over 50s has widened by more than 50 per cent since 1997.

It warned: “This could be condemning today’s young workers to a lifetime of lower wages throughout their careers.”

It found that almost all the money spent by households of those in their 20s was on essentials such as fuel, power, food and transport, and this was more than for any other age group.

It also found that the cost of renting and energy bills now accounted for nearly a quarter (24 per cent) of all the money spent by these households, up from 15 per cent a decade ago.

Spending on net rent rose by nearly 35 per cent for 20-somethings in the decade to 2012, with the report claiming that this “severely restricted” their ability to spend money on other things.

The report said: “This raises genuine concerns as to whether the current generation of workers in their 20s will be able to catch up with workers in their 30s, who have raced ahead, or whether the pattern of people enjoying the highest wages of their life during their 30s will be broken for this generation.”

Adviser view

Mark Waters, investment manager for Hove-based Skerritts, said: “It’s tough out there for all age groups. But when you are starting out in your career, wages are going to be lower. You have to go through the ‘hard stuff’ before your career is established.”

Median gross weekly pay by age group between 1997 and 2013