Post-war baby boomers were once labelled the ‘selfish generation’. With boomers benefiting through the years from free education, rising property prices, booming investment markets, and gold-plated final salary pensions, it’s perhaps a reasonable accusation to make.
But new data has challenged the long-held assumption that members of the baby boomer generation get an unfair share of benefits in society, relative to younger people.
According to the Office for National Statistics, younger people tended to receive higher state benefits than older people did when they were young. Younger people today are also paying less in tax than their older relatives did at the same age.
More recent younger generations have enjoyed faster income growth in their twenties, compared to older generations. However, inequality in property wealth remains a big issue, with the baby boomers sitting on vast fortunes tied up in their homes.
The data shows that, in general terms, house income tends to increase at the fastest pace during our twenties, across all generations. Average household income then falls again in our mid-50s. So this appears to show that younger people have it better today than previous generations when it comes to taxes, benefits and income progression. Despite this, younger people do find it much harder now to get a foot onto the property ladder.
The difficulty in becoming a first-time buyer is one source of intergenerational unfairness. That was the conclusion of a House of Lords committee, which found that 60% of potential first-time buyers could not access property wealth without some external support.
That committee urged the Financial Conduct Authority to intervene, to encourage more innovation in the sector, which could result in younger people buying their first homes.
Some different research has found that baby boomers are becoming increasingly peeved at being on the receiving end of blame around home hogging and the resulting intergenerational unfairness.
According to the research from over 50s membership organisation Saga, more than two-thirds of its members feel their generation is unfairly criticised for having a disproportionate share of society’s advantages.
The members polled for this survey said their motivation for buying a property and consistently saving was to help provide for future generations. As a result of regular press commentary reinforcing the perception of intergenerational unfairness, six in ten Saga members feel the relationship ‘divide’ is increasing the gap between older and younger generations.
The idea that the older generations are somehow depriving their younger counterparts of wealth and opportunity is not only damaging but completely false. Many have built up their wealth, often limiting their own spend, to ensure they’re in a position to financially help younger family members.
With eight in ten feeling the strain from this inter-generational conflict we hope that people start to see through the headlines to the facts – that the overwhelming majority want to use their financial security to help their wider family prosper.Lisa Harris, Group Head of Communications at Saga
Baby boomers who are often accused of ‘hoarding homes’ had little direct control over the economics that resulted in property price growth during their lifetimes. When they were younger, boomers were encouraged to buy property, with homeownership an aspirational message around becoming self-sufficient and providing for future generations.
80% of those surveyed said they are saddened by intergenerational conflict, and 85% said they would financially support children and grandchildren if they were in a position to do so. This pledged financial support includes helping with childcare, buying a home, and lending money.
The story of the generational divide has become so ubiquitous that people now believe it, and these divisions are being capitalised upon by policy-makers to find a rationale for clawing back benefits for older people.
In fact, the whole idea that there’s a generation of greedy people sitting on the nation’s assets is insulting and wrong. I’m concerned about how vicious this debate is becoming.
Findings such as these from Saga indicate that older and younger generations are not at war with each other, and I hope this can help to counteract the stereotypes and scaremongering.”Dr Jennie Bristow, a lecturer at Canterbury Christ Church University and author of books on inter-generational issues
Jon Doyle is Founder and Financial Planner at Juniper Wealth Management. Advising clients since 2008 he has guided clients through good time, bad times and the ugly. With a clear vision on how advice should be delivered and strong opinions on how we should be investing money in order to live the life we want to live free from money worry.