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“Baby Boomers” profit, while “Baby Busters” miss out

‘Baby busters’ born in the early 1990s face poorer prospects for housing, pensions and other financial wealth, than their ‘baby boomer’ parents, born in the early 1960s.

A new PwC report found that while the generation of students just starting out at university are likely to live longer and have higher absolute levels of consumption, they will only be able to buy their first house at 35.

Based on the hypothetical lives of two NHS doctors with similar life choices, one born in 1963 and the other in 1993, the study looks at the levels of housing, pension and wealth accumulation.

Richard Podd, director in PwC in the North East, said: “There is no doubt that times are changing for the next generation.

“Getting a foot on the housing ladder is a distant dream for many, and is set to become even more so for the baby busters born in the early 1990s, who face leaving university with significant debt.

“Even with a well-paid job, the reality of life ahead is that paying down the debt will make saving for a deposit so difficult that it will be almost impossible for them to think about buying a property for many years, if not decades - they may be ‘generation rent’ for much longer than they expect.”

The report also considers some policy solutions that could redress the imbalance.

For instance, raising the state pension age further for the baby boomers; increasing the taxation of baby boomer housing wealth (so allowing lower taxation of the future incomes of the baby busters); and making more affordable and better quality rented housing available for the baby busters.

This was posted in Bdaily's Members' News section by Ruth Mitchell .