The UK's young adults are facing inflation rates three times higher than those once faced by pensioners, according to new analysis which suggests that rises in the cost of living are not being distributed equally throughout society.
According to Fidelity International, the "widening generation inflation gap" is being driven by under-30s spending more on goods and services such as rent, household bills and dining out, which are getting more expensive, and less on groceries, which have become cheaper in recent months.
While inflation has remained close to zero for the past year, when broken down into age demographics, under-30s experienced rates of 0.9 per cent compared to just 0.3 per cent for the over-65s.
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The findings will underscore warnings about the rising pressures on younger people "as they struggle to get on the housing ladder, pay off student debt and cover their living costs while pay growth is so weak", says The Guardian.
"Scratch beneath the surface and there is a clear generational divide when it comes to the cost of living," says Maike Currie of Fidelity International.
The report is the latest sign of generational inequality in Britain. Last autumn, the Office for National Statistics revealed pensioner income, which has been propelled by above-inflation increases under a "triple-lock" on the state pension in recent years, is at a record level. Older people now have more disposable cash than their working age peers.
As older people tend to own their homes and have thereby benefitted from the stratospheric rise in property values in the past few decades, a report by the Resolution Foundation in December found that over-65s now control a greater share of overall wealth than those aged 16-45.
UK wealth divides: are the young being left behind?
11 December 2015
A report from the resolution foundation and its former Conservative MP executive chairman has again brought focus on a generational divide in UK wealth.
Both the BBC and The Guardian report that according to statistics produced by the think-tank, households led by recently retired pensioners aged between 65 and 74 are doing better than those aged between 16 and 45. The latter, younger generation's share of overall wealth has fallen from 20 per cent to 16 per cent since before the financial crisis, while that of the former, older generation has risen to around 19 per cent.
There are also fewer households within the recently retired demographic for this to be spread between, suggesting even higher wealth on a per household basis.
Both articles cite the report's conclusions that this shows how pensioners were more insulated from the crash, both because they already owned property and because their pension payments have been generously increased while wages have stagnated. It has become harder for younger people, who are earning less, to get on the housing ladder.
A speech given by Willets yesterday emphasised some of these points, but highlighted particular problems for younger generations. While a number of reports suggest that less than half of those under 40 will own their own home in the next decade, those aged between 55 and 64 today are the richest group across the whole economy - and their wealth is being more protected in retirement.
Willets argues "the government has to do more to boost housing supply and to raise productivity to 'get wages growing faster'," the Guardian notes.
Baby boomers beat younger peers on income and savings
1 December
Baby boomers are saving twice as much as those in their 30s and 40s, according to official data.
The new figures will debunk the stereotype of free-spending pensioners and allay fears that that many are blowing their retirement funds. Far from running out of money, it seems that over-65s are cutting back on non-essential spending when they retire.
The average person aged between 70 and 74 saves £4,043 a year from his or her annual income, while someone aged 40-44 puts aside just £2,411.
The Office of National Statistics revealed last month that pensioner income had risen to a record high, while working age households have still not fully recovered from the financial crisis. While working age income was higher overall, with most retired people having cleared property expenses in many cases they have more disposable income.
According to separate research conducted by the Institute for Fiscal Studies, this is the first time pensioner households have enjoyed higher incomes than those in work. Its figures showed pensioners' income above that of their working age peers at £394 a week compared to £385.
Malcolm McLean, a former government pensions adviser, told the Daily Telegraph the results highlight a worrying generational gap. Baby boomers have "benefited from generous final salary benefits and now their state pensions are triple-locked, so they can afford to put some aside," he said. "Young people have large rents and mortgages which they will spend years paying off."
