Generation Y is first since war to be worse off than their parents

● Those born in early 1980s have about half the personal wealth

People born in the early 1980s have about half the wealth that those born a decade earlier had at same age, research has revealed.

The older end of “Generation Y” – which comprises people born from the early 1980s to the 1990s – has become the first post-war cohort not to enjoy higher incomes in early adulthood than those born in the previous decade, the study said.

The group, who are now in their mid-30s, have found it harder than their predecessors to build up wealth in housing and pensions as they age, according to a report from the Institute for Fiscal Studies.

They have much lower home-ownership rates in early adulthood than any other post-war cohort, and – outside the public sector – have much less access to generousddefined benefit pension schemes than previous generations did at the same age.

They have also been affected by the stagnation of workingage incomes, as well as the fact that the Great Recession of the late 2000s hit the pay and employment of young adults the hardest.

The study found that in their early 30s, people born in the early 1980s have average net household wealth of £27,000 per adult – including housing, financial and private pension wealth. This is about half the £53,000 average that those born in the 1970s had at around the same age.

Andrew Hood, an author of the report and a Research Economist at IFS, said: “By the time they hit their early 30s, those born in the early 1980s had about half as much wealth as those born in the 1970s did at the same age.

“Sharp falls in homeownership 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.”

The study found thatn their late 20s, renters born in the early 1980s spent nearly 30 per cent of their net income on housing costs - ten per cent more than the previous generation and 15 per cent more than homeowners.

Meanwhile, at the age of 30, only 40 per cent of those born in the early 1980s were owner-occupiers, compared to at least 55 per cent of the 1940s, 1950s, 1960s and 1970s cohorts.