The study by the Resolution Foundation found a typical person under 35 earned £8,000 less in their 20s than generation X workers (people born between the baby boomers and the millennials.)

While much of this squeeze was due to young people entering the labour market during an economic downturn, the report said generational pay progress had actually stopped before the financial crisis.

It found that even an optimistic scenario, in which the future pay of millennials improves rapidly and follows the same path as the baby boomers, their lifetime earnings would be around £890,000.

This potential generational pay penalty comes on top of a bleak outlook for home ownership among millennials, the report said.

It said baby boomers were 50% more likely to own their home by the time they were 30 compared to millennials today. This shift towards renting and higher rents has meant that millennials have spent £44,000 more on rent by the time they reach 30 compared to the baby boomers.

Torsten Bell, director of the Resolution Foundation, said: “Generational inequality risks becoming a new inequality for our times, and nowhere is that clearer than on pay. We’ve taken it for granted that each generation will do much better than the last – earning more and enjoying a higher standard of living. But that approach risks looking complacent given the realities of recent years and prospects for the future.

“Far from earning more, millennials have earnt £8,000 less during their 20s than the generation before them. The financial crisis has played a role in holding millennials back, but the problem goes deeper than that. Even on optimistic scenarios they look likely to see much lower generational pay progress than we have become used to, and there is even a risk that they earn less over their lifetimes than older generations, putting generational pay progress into reverse.”

The report follows warnings by Prime Minister Theresa May made during her leadership speech last week of the “growing divide between a more prosperous older generation and a struggling younger generation”.