The Institute for Fiscal Studies has released some interesting statistics about the state of British people’s incomes since the start of the global financial crisis in 2008, and there are some sharp contrasts evident.
Firstly, let’s cover the good news. Despite a steady trickle of doom and gloom in the media, it turns out that pensioners are actually doing pretty well, seeing an average rise in income that beats out all of the other age and demographic groups highlighted by the study. The rise is put down to steady increases in government benefits as well as the fact that many retirees are continuing to work in some description, topping up their income.
Alas, it can’t all be positive. While those aged 31 and over have seen relatively little change in their income, the younger generation has been hit the hardest with an average reduction in their income of 7% (predominantly due to stagnation in the jobs market post-recession). Alas the Brexit vote adds further expectations of slowing economic growth, which may hit younger people the hardest.
Combine this with the data from the Resolution Foundation which claims millennials may well become the first modern generation to earn less on average than their parents, and it’s obvious that young people need to start taking care of their finances as early as possible. As ever, young or old, we would recommend speaking to our advisers to ensure your current finances and future plans add up.