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Platinum Jubilee generation 'richest in history so far'

Platinum Jubilee generation 'richest in history so far'
 

The Platinum Jubilee generation is the richest in history so far, according to the Institute for Fiscal Studies (IFS).

This week marks the celebration of the Queen’s Platinum Jubilee – 70 years since she became Queen in 1952. 

In light of this event, IFS looked at the generation of people who were born in 1952 to understand the changes that have occurred in British society over the last 70 years.

IFS said this generation have average household incomes - after accounting for household composition and housing costs - that are higher than the population as a whole and higher than the incomes they themselves had over most of their working lives. 

“This generation benefited from the strong growth in earnings in the 1980s and 1990s in particular, and from the increasing generosity of the state pension in more recent years,” it said.

“When they were 25, at the time of the Silver Jubilee, their average incomes were £12,500, expressed in 2020–21 prices, compared to £10,700 for the whole of the UK.”

Source: Authors’ calculations using the Family Resources Survey and Family Expenditure Survey. Figures are for Great Britain only before 2002

The peak of their incomes came just after the Golden Jubilee when, in 2005, they had average incomes of £27,800, a full £5,700 higher than the UK average. 

“They now have incomes of £26,400 per year, 6 per cent (£1,500) more than the average,” it said. 

The IFS explained that many in this generation rode the wave of the UK’s property price boom. 

Around 85 per cent of them are homeowners and 14 per cent, or one-in-seven, own a second home. 

In 1952, the average property price was £2,000, around £40,000 in today’s prices, and that rose to £13,000 by 1977 (£64,000 today). Currently, this stands at £260,000.

“Of course, not all of the Jubilee generation are well off. [Some] 18 per cent were in relative income poverty prior to the pandemic, compared to 22 per cent for the UK as a whole. 

“But this still represents a remarkable change: in 1977, the Silver Jubilee year, those over state pension age were more than twice as likely to be poor as those under state pension age.”

IFS argued that while the generation born as the Queen came to the throne in 1952 have seen huge changes, the uncertainty moving forward is huge. 

“Some trends will likely change: although younger generations are much more educated than the Platinum Jubilee generation, with around half now attaining a university degree, income growth is not expected to be as strong in the future as it was over the Queen’s first 50 years on the throne,” it said.

“There are challenges ahead. The large rises in house prices enjoyed by the Platinum Jubilee generation have seen homeownership rates fall for younger adults. Will those rates recover again or will we see generations where a large proportion are private renters throughout their lives?”

IFS added that perhaps the greatest changes will come in “pursuit of rapid de-carbonisation of the economy”.