IFS: The next generation to be poorer than their parents at every stage of their lives

Emma Haslett
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We all know Millennials were at the pointy end of the financial crisis - but the resulting effect could last for the rest of their lives, according to new findings.

The research, by the Institute for Fiscal Studies (IFS), suggested young people are likely to have less wealth at each point in their lives than earlier generations did at the same age, unless the rate at which they are accumulating wealth picks up. In other words, unless they begin to get richer, faster, they're going to be less well off than their parents were.

The report studied changes in households' wealth between 2006-08 and 2010-12, and found that while average financial wealth grew by £6,000 for those in the 45-54 age group, for 25-34 year olds, that was much smalle, at £4,000.

Meanwhile, pension income wealth increased by £13,000 for those in their 20 and early 30s, compared with £38,000 for those in their late 40s and early 50s.

What's interesting is that property wealth among the youngest group actually rose during the period - while it fell among all the other age groups.

And the youngest group's expectations of their future wasn't exactly encouraging. Nearly a quarter said they don't expect to receive a state pension - while 44 per cent said they didn't expect to receive any income from a private pension. Meanwhile, 28 per cent said they expected an inheritance.

Rowena Crawford, a senior research economist at the IFS and one of the authors of the report, said: “It is striking how many individuals do not expect private pensions to have a role in financing their retirement, let alone be their main source of income.

"It will be interesting to see how these attitudes change as auto enrolment into workplace pensions is rolled out.”

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