No wonder young people, the victims of our housing crisis and pensions mess, have gone off capitalism

Julian Harris
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Property Owners Braced For Interest Rate Hike
Millennials find it increasingly difficult to accrue wealth (Source: Getty)

Young British people should be the most business-friendly generation in decades.

They have grown up and thrived in an era of rapidly-changing technology. As customers, this offers them a vast array of new goods and services. As workers, it provides a range of varied and stimulating career options.

The entrepreneurial drive of youth is increasingly channelled through pop-ups and startups, with technology helping to smash through traditional barriers to entry.

Yet millennials appear to be planted on the more socialist end of the political spectrum, with millions voting for Jeremy Corbyn’s Labour party, and a recent British Social Attitudes survey noting a shift towards economically left-wing views.

So why are so many young Brits seemingly disillusioned with capitalism? One answer may lie in the distribution of capital itself, particularly between the generations.

Read more: British savings ratio falls to record low

Research this week from the Council of Mortgage Lenders suggests the era of “broad-based equity building” through home ownership is quite possibly dead. The number of home-movers remains 25 per cent down on pre-recession levels, and may never recover. The gap is due to “mortgaged home-owners not moving up the housing ladder,” the CML says. While previous generations could take an extra step up every few years, even the millennials fortunate enough to climb the first rung find themselves unable to progress further.

Rather than an exercise in gaining capital, home ownership looks more like a long-term struggle to pay down a huge debt pile – and that’s once you’ve raised an astronomical deposit.

Pensions, alongside property, enabled a large section of the population to accrue capital in recent decades. Yet schemes have become less and less generous, especially in the private sector. Many young people will not have been offered a workplace pension at all, until the advent of auto-enrolment – and those employed in the so-called gig economy could still be missing out. Furthermore, low wages, high costs and virtually non-existent interest rates have combined to drive the UK savings ratio to an historic low.

For capitalism to thrive, people must be able realise its benefits in the most tangible way possible – by seeing their own assets grow, as just reward for years of hard work. A failure to do so puts the very foundation of our liberal market-based economy at risk.

Read more: Yes, austerity is a choice – but it's not an easy one

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