Friday, 30 September 2016
30 somethings half as wealthy as 40 somethings
Interesting report from the Institute of Fiscal Studies. Younger people are poorer on average than older people.
As ever, I love anecdotal evidence from my own view, my large team at work would confirm this. Many people happily working for the wages the same or lower than I had when I was their age.
Note the SAME wages, not adjusted for inflation. So when combining that with rent increases and cost of living increases they have a much harder time. Yes, due to social media and internet technology (and cheaper travel) they do I think have richer cultural lives than were possible; but it is on more of s shoestring and a live for today mentality prevails ever more.
Yet the report for me lacks one huge point (which they note they will get around to later), which is longevity. One of the reasons younger people are poorer is because their parents are still alive - for which overall they will be very grateful for in the round.
With every passing generation the age of inheritance is set to increase, possibly by 5-10 years each time. Plus of course the elderly will spend more of their wealth on supporting themselves, thus leaving less to hand on.
As I said, this is a hugely great thing for us all collectively, but does have ever bigger ramifications down the ages, literally.
It is an odd thing for a report like this to miss though, as this skew is one of the larger longer-term trends that affects the whole study and so renders what is left fairly incomplete.