• Median real earnings for employees are 3% below where they were in 2008
• Millennials have been hit hardest:
o Median earnings for people in their 20s in 2017 are 5% lower than in 2008
o Median earning for people in their 30s in 2017 are 7% lower than in 2008
You can read the report here - https://www.ifs.org.uk/publications/13302
Laura Suter, personal finance analyst at investment platform AJ Bell, comments:
“Since the financial crash millennials have faced soaring tuition fees, an increasing struggle to get on the property ladder, rising rental costs and incomes that are below where they were 10 years ago.
“The widening gulf between generations is partly due to Government decisions to maintain the triple-lock on pensions, while also bringing in much higher tuition fees.
“The effect of the difficulty many millennials face getting on the housing ladder cannot be underestimated. The average house deposit cost 12% of the average salary in 1997, compared to 65% of the average salary today. What this highlights is the real difficulty people face buying their first home without help from their family – and this could create a bigger divide than the income disparity between generations. The millennial generation will be split by those with high-earning jobs or with parents who can help with a deposit, and those who have neither.
“What is also alarming to note in the 10 years since the financial crash is the sheer level of debt people of all ages have taken on. Low interest rates and relatively easy access to debt mean that households are now, on average, spending more than they earn for the first time since 1988. Even in the run up to the financial crisis, with the era of 100% or more mortgages, debt in households was not higher.
“This is coupled with a decline in the amount people are saving, in part due to the low interest rates on offer and in part due to wages failing to keep up with the cost of living, driving more to raid their savings for everyday living.”