How has your income fared since the crisis? / Accesing tax-free cash from a pension
Millennials have been hardest hit by the financial crisis, with their wages being affected more than older generations, a new study has found.
The Institute for Fiscal Studies report looked at how different age groups have fared since the global financial crisis, sparked by the collapse of Lehman Brothers 10 years ago.
The report found those in their 20s are earning 5% less than those in their 20s in 2008, while those in their 30s are earning 7% less than their counterparts were earning a decade ago. This compares to those aged 60 and over, who are earning 1% less than those in the same age group 10 years ago.
In monetary terms, those in their 30s are earning on average £2,057 less than 10 years ago, with an average salary of £26,442. This compared to those aged over 60, whose average earnings have fallen from £18,766 to £18,637.
A DIFFICULT DECADE Jonathan Cribb and Paul Johnson, authors of the research, say: ‘Alongside poor earnings growth and government policy decisions which have tended to favour the old, this has contributed to a decade during which the living standards of young people have done much less well than those of older people. For example, the after housing costs incomes of those in their 20s are still below where they were in 2008, whereas for those over 60 they are almost 10% higher.
‘We should never stop reminding ourselves just what an astonishing decade we have just lived through, and continue to live through… record low earnings growth, record low interest rates, record low productivity growth, record public borrowing followed by record cuts in public spending.
‘On the upside employment levels are remarkably high and, in spite of how it may feel, the gap between rich and poor has actually narrowed somewhat, but the gap between old and young has grown and grown.’
RECRUITMENT SITUATION What’s clear from the research is that many of those in their 20s were entering the job market for the first time just after the financial crisis, when it was difficult to get a job as so many positions had been cut or companies weren’t hiring.
As a result, those individuals were paid less than their age group had been previously. This, coupled with the fact that wages across the board have stagnated over the past decade, means they are still earning less now.
During that time, millennials