Millennials get a lot of bad press. Everyone’s seen the headlines and think pieces pointing out that they’re eating themselves out of house and home, chucking all their money at artisan coffee makers and gorging on avocado toast at the expense of ever being a property owner.
“But we wouldn’t be able to afford it anyway,” they cry, only to be drowned out by accusations of entitlement and baseless whinging.
However, there was some (very cold) comfort delivered on Wednesday, when statistics revealed that millennials really are the hardest hit by the financial crisis.
The IFS reports that wages for people in their 30s are about 7 per cent lower than they should be, based on pre-financial crisis growth rates, while pay for those in their 20s is 5 per cent worse. The over-60s got off relatively lightly, with earnings just 1 per cent lower.
Of course, for anyone who falls in that category, myself included, this information will come as little surprise. Entering the world of work in the midst of one of the most brutal recessions the UK has ever experienced was always going to have an impact.
Recessions always leave a mark on people’s financial lives, and it’s hard to separate the financial from all other aspects of life. Money might not make the world go round, but it certainly makes things easier. So while the country may have moved out of recession, though it took a while, for many it still has a bearing on how their lives are panning out.
It’s plain to see that the millennial generation is living life a few steps behind those who came before. People are marrying later, putting off having children and home ownership is a pipe dream for the majority, who can’t rely on the bank of mum and dad or grandparents for help.
Starting out in the workplace at a time of low wages and low interest rates means a lot of millennials approach finances in ways their parents probably wouldn’t recognise.
Savings rates have tumbled, which makes sense: a base rate of 0.5 per cent isn’t much of an incentive to keep your money in the bank.
The housing crisis hasn’t helped, with the lack of available properties and inflated prices keeping people locked into the cycle of ever-increasing rent curbing their ability to save.
Meanwhile, young people are increasingly saddled with debt. This is not a problem confined to millennials – earlier this year, household spending for the whole of the UK surpassed income for the first time in almost 30 years – but there are some burdens that have fallen heavier on the younger generations.
Tuition fees were introduced across the UK in 1998, the time when the first millennials, born in 1981, were getting ready to go to university. The fees brought in at the time were capped at £1,000 a year, a lot more than the previous £0 charged, but a lot less than the costs faced by younger millennials who started third level education from 2012 onwards. Student debt has now ballooned to the point where most students will never be able to repay their loans.
So from the get-go, the depleted salaries they are making will be cut ever further to allow for repayments.
It’s no wonder so many millennials are claiming to be going through a “quarter-life” crisis.
That’s not to claim that this generation is the first to be affected by a recession. Generation X came of age during the recession of the early Nineties. But in the decade following that crash, the economy bounced back, with the democratisation of the internet bringing with it massive opportunities.
This time around, 10 years on from the most recent downturn, the UK is still trapped in austerity, wages still haven’t returned to pre-crisis levels and Brexit is looming. The effects of a recession will always leave a deep mark, but we’re nowhere near seeing the full impact of this one yet.