Children of 80s 'half' as wealthy as 70s kids, study says

People born in the early 1980s are about half as well off as those born a decade earlier were at the same stage of their lives, a new study suggests.

The report by the Institute for Fiscal Studies (IFS) found that the younger group, now in their early 30s, has average wealth of £27,000 per adult.

That compares to a figure of £53,000 for those born in the 1970s when they were in their early 30s.

The study explained that the thirty-somethings had missed out on better pensions, house price growth and stronger wage rises - with the impact of the financial crash hitting young adults the hardest.

Wage stagnation, the IFS said, saw the real average income for those aged 25 to 55 rise by 2% in the decade to 2015, compared with a surge of 26% in the decade to 2005.

It described the children of the early 1980s as being the first post-war generation not to have higher incomes than those born in the previous decade.

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Andrew Hood, of the IFS, said: "Sharp (Other OTC: SHCAF - news) falls in home-ownership rates and in access to generous company pension
schemes, alongside historically low interest rates, will make it much harder for today's young adults to build up wealth in future than it was for previous generations."

In giving its response, a Treasury spokesman said: "Since 2010 we've made real progress in improving people's living standards: 2.7 million more people in our country have a job; we've given a pay rise to a million of the lowest paid with the National Living Wage; we've increased the personal allowance so that 1.3 million people will be taken out of income tax altogether by next year; and we've overhauled the welfare system so it pays to work.

"‎And through our landmark Help to Buy schemes, we have helped 185,000 people achieve their ambition of home ownership.

"As the Prime Minister has said, the Government is determined to build an economy that works for all, not just the privileged few."

Critics pointed to an impact from austerity.

Liberal Democrat Treasury spokeswoman Susan Kramer said: "This is what happens when short-term political calculations override the need to build a better future for everyone.

"Year after year, government after government, we are failing to support the next generation, often because the simplest political solution is to focus purely on those more likely to vote.

"We need to redress the balance between generations," she said.