THE millennial generation of young people born after 1980 are better qualified than their parents were at the same age but earn less, are more likely to be single and are less likely to own their own homes.
A study spanning five generations of people when aged 25-32 shows the millennials have lower incomes than the previous generation despite twice as many of them (35%) having a degree.
The average income of the millennials was £19,278 in 2012, the latest available data, compared with £20,128 earned by Generation X, those born between 1965 and 1980, at the same age, according to the study by NatCen Social Research. The figures reflect the recent recession, which has kept down salary rises.
One in six of those aged 25-32 lives in the family home, compared with one in 10 of the previous generation at the same age, and one in 12 of the early baby-boomers.
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High house prices relative to average incomes and a squeeze on lending are likely to be major factors behind the change. The millennials are also less likely to own their own home than their grandparents or those born during the prewar and war years of 1928-1945. Some 42% of this group, dubbed “the Silent Generation”, owned their own property between the ages of 25 and 32 compared with 35% of the millennials.
Heather Ellis, a social historian at Liverpool Hope University, said: “There is an interesting comparison between these generations. The trend to rent in the early 1960s was a reaction to the Great Depression and financial austerity of the Second World War, just as today’s rental culture is a reaction to the financial crisis of 2008.”
Natalie Dickinson, 25, a PR manager, still lives with her mother two years after graduating from university. She saves about £350 a month but says it will take years to build up enough for a deposit.
“Investing in my career is the only way I’ll be able to save that money. My mum’s not in a position to set aside a big chunk of cash for me, and I don’t expect that. I would like to say the bricks and mortar I go home to every night are something I’ve worked for.”
By comparison, Natalie’s mother was quick to get on the property ladder in her youth and made a substantial profit after selling her first home.
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Joanne Dickinson, 49, was born at the end of the generation of baby-boomers. She left school at the age of 16 and got a job with an insurance broker. By the age of 22 she was married and able to buy her first home.
She said: “I married my childhood sweetheart. We saved up for a deposit in three years and bought a lovely semi-detached bungalow for £25,000. We sold it for £80,000 15 years later.”
It was Joanne’s generation that saw a peak in home ownership of 64%, in 1986, after Margaret Thatcher introduced the right to buy for council house tenants.
Natalie’s experience is closer to that of her maternal grandmother, June Ball, who was born in 1936. Now 78, June rented with her husband for many years before they got their first mortgage at the age of 40. She still lives in the property today.
Whereas today’s millennials mainly rent in the private market, the Silent Generation benefited from mass construction projects that provided large numbers of affordable council houses.
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Gill Payne of the National Housing Federation said: “Even millennials on decent pay are struggling to raise a deposit or pay their rent. The government is still not building enough homes.”
David Finch, senior economics analyst at independent think tank the Resolution Foundation, said: “While the boomers benefited from growth in housing wealth, generous state provision and long retirement, the millennials and Generation X will have to worry about how to fund their retirement without their housing assets and with their children still requiring financial support.”
David Furniss, 25, has been living with his parents in Bromley, Kent, since he graduated two years ago.
He said: “I’m recently engaged, and we want to buy our own place, but we are only able to consider this because my parents are supporting us by way of a gift. Apart from a mortgage we want to stay away from borrowing too much, as the future is so uncertain.”
Furniss, who works for an energy consultancy firm, said he had expected his earnings to be higher after obtaining his maths degree.
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“Like a lot of firms, my employer aims for graduates, but only because the market is so saturated.”
Vicky Pryce, chief economics adviser at the Centre for Economics and Business Research, said: “An increase in those going to university has downgraded the value of a degree, but if you don’t have one you can get stuck in a low-earning environment.”
Pryce said it was not all bad for the millennials, however. “It may look tough, but living at home is more comfortable, computers make our jobs easier, and quality of life overall has increased substantially.”