People in their early thirties have half the median wealth of those born in the 1970s, according to a new report from the Institute for Fiscal Studies.
Those born in the 1980s have a median average net household wealth of £27,000 per adult, including housing, financial and private pension wealth, the study found.
This is about half the median wealth that those born in the 1970s had at around the same age, £53,000.
The Institute of Fiscal Studies' research published today (30 September) looks for the first time at both the overall household wealth and total income of different generations.
According to the research, those born in the early 1980s are likely to find it harder than their predecessors to build up wealth in housing and pensions as they age.
These people have much lower home-ownership rates in early adulthood than any other post-war group, and – outside the public sector – have much less access to defined benefit pension schemes than previous generations did at the same age.
Additionally, those born in the early 1980s were the first post-war cohort not to enjoy higher incomes in early adulthood than those born in the previous decade, which is partly the result of the overall stagnation of working-age incomes, but also reflects the fact that the recession following the 2007 financial crisis hit the pay and employment of young adults the hardest.
High housing costs are another key factor, according to the report, which found renters born in the early 1980s spent nearly 30 per cent of their net income on housing costs - largely rents - compared to 15 per cent for homeowners, largely mortgage interest.
Andrew Hood, an author of the report and a research economist at IFS said: “By the time they hit their early 30s, 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.”
