Millennials on course to become ‘richest generation in history’
Millennials may have been portrayed as frivolous spenders squandering their income on overpriced coffees and online barre classes in the face of pitiful long-term finances – but they are on course to become the “richest generation in history”, a study has shown.
Those born between 1981 and 2000 are in line for a “seismic” windfall over the next 20 years, according to research by real estate agent Knight Frank, thanks to the property assets accumulated by the generations before them.
While the distribution of wealth may be shifting between world regions, an even bigger shift is happening between generations. The switch will see $90tn (£71tn) of assets move between generations in the US alone, “making affluent millennials the richest generation in history”, Knight Frank said in its 18th annual wealth report.
The research found that 75% of millennials expect their wealth to increase in 2024, against 53% in the baby boomer generation (those born between 1946 and 1964), 56% in gen X (1965 to 1980) and 69% in the younger gen Z.
While they wait for their inheritances, many millennials are still reeling from a series of economic shocks, with the 2008 crash followed by a series of financial headwinds brought about by the pandemic, Brexit and war in Ukraine.
As a result of rising rents, they have spent much of their income on housing costs and faced significant challenges to afford their own homes or build up a pension pot. The conditions have fuelled an image that millennials – shorn of the target of saving their income to acquire property – have frittered their money away on pricey pastimes and avocado on toast.
In reality, their future financial firepower is likely to be a divisive lottery, predominantly determined by inheritance from previous generations, including property.
Liam Bailey, global head of research at Knight Frank, said the shift in wealth was likely to aid efforts in sustainable investments and behaviour. “Millennials appear to have got the message when it comes to cutting consumption – 80% of male and 79% of female respondents say they are trying to shrink their carbon footprints,” he said.
He forecast that wealth creation trends among those in Gen Z suggested that the 38% increase in female ultrahigh net worth individuals – those with more than $30m in assets – over the past decade “is set to keep on building”.
British millennials are still bearing the “economic scars” of the 2008 financial crisis and are struggling to catch up with the living standards of older groups, recent research by the Resolution Foundation has found.
Property, financial investments and cars were among the most significant sources of wealth, the Knight Frank study found.
Among smaller items, the report found that the market for secondhand bags had eased, while the fine wine market grew marginally and sales of watches at the three big auction houses totalled £488m in 2023, a slight increase on the year before.
At the high end, Canadian rapper Drake paid $1m for a ring formerly owned by the late Tupac Shakur at Sotheby’s hip-hop auction last July.