Tuesday, May 28, 2024

Why young people think their parents and grandparents had less pressure with their finances

A new, recent study has revealed that 59% of young people think that the older generation had a far easier financial life than they do. Millennials worry a lot about student debts, expensive rent, runaway house prices, and how they will ever be able to afford the kind of lifestyle their parents have. But are they right? Did previous generations have a far easier life?

Will someone have to die before you can buy a home?

Those who hit their 20s and 30 in the 1990s had student debts to think about, but without tuition fees they were a drop in the ocean compared to those Millennials are having to deal with. The study, by Provident Financial, found that they faced far lower house prices, with an average price of only £70,000. With the average income at £19,982 this meant homes cost an average of 3.5 times salary. They also benefited from a boom in cheaper travel, with many budget airlines becoming more established. They did, however, have to live without the internet or music streaming. Eating out was also far less common – and discount vouchers were almost unheard of.

Those hitting their 20s and 30s in the 1980s were even better off when it came to housing. The average salary was £16,708 and the average property £33,898, so houses were a fraction over two times salary. Of course, it wasn’t all a bed of roses. Unemployment rose dramatically, so finding work wasn’t always easy, and young people might easily find themselves on a low-paid YTS scheme. The death of traditional industries during this period meant if you happened to live in certain parts of the country, your future looked particularly bleak. The study asked people who were young at this time what the majority of their disposable income went on, and they said it was their family.

Those who were young adults in the 1970s could easily afford a home of their own, as the average house cost only £11,000 and the average income was £14,262. Of course, it was far harder to get a mortgage, and the punishingly high interest rates of the 1970s made them outlandishly expensive, but if you were prepared to save up your money homes didn’t seem so far out of reach. There was the chance of a student grant back then also, so you were effectively paid to study if you were only one of the one in seven who went to university. You were, however, far more likely to be living in a single income household, as most people were married in their early 20s, the average age of a first time mum was 25, and women were more likely to stay at home with the children. There was far less money and opportunity for going out and spending money on entertaining yourself.

If you were young in the 1960s housing seems much more affordable, with the average wage at £11,103 and the average house costing was only £4,000 – reflecting the effect of the enormous post-war house-building programme. Although, this may not be as clear cut as it seems though as workplaces were far more hierarchical back then, and higher wages took years to work towards, so young people still had to really strive to get on the housing ladder. Getting a mortgage was a real palaver too. And while the cost of things like groceries wasn’t outlandish, you would pay a small fortune for luxuries like cars, white goods and TVs, so having many of the things young people now take for granted was a pipe dream.

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