Young people ‘worse off’ than parents

Young people are in a worse economic position than their parents, a new survey has revealed.

A report by independent think-tank Reform dubbed those under the age of 35 the ‘IPOD Generation’ – standing for ‘Insecure, Pressured, Over-taxed and Debt-ridden’.

According to the report, young people are facing rising debts, difficulty in getting on the housing ladder, falling returns from higher education and fierce competition in the labour market.

The report warned that young people are being forced to support an increasing number of pensioners, while also making greater provisions for themselves, for example to pay for higher education and private pensions saving.

Young people are also finding it difficult to get on the housing ladder, with the average age of first-time home buyers rising to 34.

The proportion of 20-24-year-olds living with their parents has now risen from 41% in 1991 to 49% in 2004. The report also found that 56% of 2002 graduates would also be financially dependent on their parents for three years after graduation.

The average debt of higher education graduates is also increasing. Currently, it amounts to an average of £13,500, although this is expected to rise to £20,000 for undergraduates.

Graduates also face a much tougher labour market than their parents. In 1961, there were less than 200,000 undergraduates in higher education, compared to nearly 1.6 million by 2004.

Reform suggested a number of policies to tackle the problem, including reductions in the tax burden, public spending discipline, extension of co-payment in public services, including health, new incentives to save and the abolition of the 50% access target in higher education.

Commenting on the findings, Nick Bosanquet, Professor of Health Policy at Imperial College London and Consultant Director of Reform, said: “Young people are not getting a fair deal. Separate policy decisions are having he cumulative effect of mortgaging for the future of a generation. People under 35 could be described as a cross-over generation who are paying the cost of the welfare state without being able to expect many of the benefits.”

Andrew Haldenby, Director of Reform, said: “In today’s Britain, it is more attractive economically to be 55 than 25. But the tendency of political parties, seen at the last election, is to ignore the interests of young people in favour of appealing to pensioners and those more likely to vote. Young people must be freed from the burden of high taxation if they are to make their vital contribution to economic growth and enterprise.”

(KMcA/SP)