MPs on the Work and Pensions Committee have just launched an inquiry into “intergenerational fairness”, investigating just why today’s young people may end up poorer, not richer, than their parents.
A toxic combination of factors, including stagnant wages, rocketing house prices and heavy student debts, have led experts to coin a new term for financially strained young people – generation austerity. Last October, the Equality and Human Rights Commission said today’s young people are suffering the “worst economic prospects for several generations”.
While pensioners’ average incomes are outpacing those of working households for the first time, a new flat rate state pension means three-quarters of 24-year-olds will be worse off than under the present system when they reach state pension age, translating to a £26,520 loss over a 30-year-retirement. Tom McPhail, head of retirement policy at Hargreaves Lansdown, says: “If they want a good standard of living in retirement they will need to look to their own private savings.”
So don’t count on the government to turn things around. Here are ten ways that generation austerity can transform itself into generation prosperity.
To read the rest, click here