Iona was back on BBC Breakfast this morning, commenting on yesterday’s Budget. From the Fitness First gym in Hammersmith (which happily was 15 minutes from home at 6 in the morning, rather than the Salford studios where she appeared on the show last month) Iona was on a satellite red sofa chatting with roving business reporter Steph McGovern.
In the 6.50 a.m. slot, Iona was asked about the new Lifetime Isa, and warned that while its simple savings message of a £1 top-up from government every £4 saved looked attractive, it could not be seen as a replacement for pensions due to the benefits of employer contributions. The landscape was now more complicated, Iona said, and financial advice would be important, creating another challenge for young people.
Back on the sofa at 8.25, Steph asked about yesterday’s winners and losers. Iona said the big winners were the better off, with the lifting of the higher rate tax band to £45K and the personal allowance to £11.5K, giving a £500 earnings boost to those on under £100K.
In the final segment at 8.40, Steph asked Iona whether the Lifetime Isa showed that it was a budget for the next generation. Iona said that only yesterday a study had found graduates were increasingly having to take unskilled work, they also had to contend with student dent and with the pressures of renting and the housing market. The £4000 allowance for Lifetime Isas would be of most benefit to richer young people, Iona said.
Iona was in the BBC Breakfast studios in Manchester this morning to take part in a live mini-debate on the “millennials” or Generation Y.
Interviewer Ben Thompson said there was a view that the baby-boomers, the generation born in the decade after the war, were better off than the millennials were likely to be, and were getting a better deal from government policy.
Kevin Mountford, an analyst with moneysupermarket.com, in his fifties, said that people growing up in the 1960s and 1970s had to contend with unemployment, the three-day week, double-digit inflation and interest rates, and the pressures of marrying earlier. Today’s generation could travel abroad.
Iona said the issues of housing, student debt and pensions were serious ones. “We need to know as a generation we are going to be taken care of, in economic and political decisions. The housing situation is a catch 22, we want to get out of the renting trap but we can’t afoord to build up a deposit. In many areas renting eats up 25 per cent of your pay packet in Londonit could be twice that.
“Then there is increased student debt – university used to be free, then it went from £3000 to £9000 and they are making the terms of the student loans less and less generous. We are getting the brunt of these economic problems and political decisions.”
Kevin Mountford said expectations now were different, which was not necessarily a bad thing. People now had access to information and comparison websites, saving money and giving more choice.
Iona quickly responded: “With that choice doesn’t necessarily come empowerment, people don’t necessarily know what the best option is, it is very confusing landscape. Young people are being exposed more all the time through social media and workplaces in a way that makes us feel we must be spending a lot of money, and that conflicts with the need to save for the future.”
Sadly, sandwiched in between bantering bellringers and the news, that was all BBC Breakfast had time for!