“This is the legacy handed down by the early 1960s ‘baby boomers’ to the generation of students just starting at university,” according to the report published today by PwC.
People born in the early 1990s will fail to get onto the property ladder until their 35th birthdays and be lumbered with around £90,000 in student debt, on average, the report said.
The “baby busters” are also set for significantly less generous pensions than their parents enjoyed.
To make up for the harmful legacy, many parents are set to provide generous levels of inheritance to their offspring – “assuming this excess wealth does not get eaten up by long term care costs”, PwC warned.
A higher state pension age for the remainder of the baby boomer generation could help redress the cross-generational imbalance, the report suggests. Taxes on housing wealth would also reduce the burden of taxation on the new generation, PwC said.
However, economic growth and technological progress mean that the latest generation will be better off than their parents in terms of absolute wealth.
They will enjoy a greater “volume and variety of goods and services”, the study said.
Britons born in the early 1990s are likely to live around five years longer, on average, than people born in the 1960s, the report noted.
“At age 65, the baby buster’s total wealth is projected to be higher, in absolute terms, at around £1.9m, compared with the baby boomer’s at around £1.6m,” the report said.
“Yet relative to average earnings in society at those two dates, the baby buster’s comparative wealth is projected to be around 25 per cent lower than that of the baby boomer.”