The think tank’s intergenerational audit has dubbed young people’s lack of spending power as the ‘consumption crunch’.

The audit, supported by the Nuffield Foundation, examines the generational living standards issues facing Britain. These issues include the labour market, housing market, state support and private pension savings, and assesses whether the 20th century norm of each generation enjoying considerably higher living standards than their predecessors still holds true.

The report found young people’s consumption – which reflects both their spending power and spending choices – has taken a big hit. People aged 18 to 29 today are spending £380 a week on non-housing items – 7 per cent less in real terms than people of the same age were at the turn of the century (2001-02).

While consumption for this group has fallen, it has increased by 11 per cent for those aged 50 to 64 (who are spending £460 a week), and by 37 per cent for those aged 65+ (spending £390 a week).

Millennials having less fun

The report also found young people are devoting a smaller share of their spending to ‘fun’  – such as recreation, restaurants, hotels and culture – which is down 3 percentage points to £100 a week. In contrast, people aged 65+ are devoting a greater share of spending on these items (up 4 percentage points to £110 a week).

Younger millennials have experienced stronger pay growth than any other age group since 2016, with the pay of 18 to 29-year-olds rising by 2.4 per cent. But the hangover of the crisis remains for older millennials. In their early 30s, the typical pay of someone born between 1981 and 1985 was 3 per cent lower than someone born 10 years earlier.

The audit found home ownership among young families has risen over the past two years, following a 66 per cent decline between 1989 and 2016. But other challenges have emerged – such as the 32 per cent increase since the mid-1990s in young people living in overcrowded accommodation.

Gender wealth gap

The report also revealed a huge gender wealth gap for baby boomers, with women in their late 60s having just over half the wealth of their male counterparts.

David Willetts, president of the Intergenerational Centre, said: “From frustrations about buying a first home to fears about the cost of care, Britain faces many intergenerational challenges. The big living standards gains that each generation used to enjoy over their predecessors have stalled.

“But while Britain’s intergenerational challenges are big, they are not insurmountable. Welcome steps are already being made – from stronger pay growth for young millennials to the success of auto-enrolment into pension saving.”