Young people’s savings and homeownership rates significantly down
Those aged 22-29 are less likely to own a home as data reveals the proportion owning property has fallen from 37% to 27% between 2008 and 2017.
This group are also less likely to have money set aside, according to research from the Office for National Statistics (ONS).
It found that 53% of those in their 20s had no money in a savings account or an ISA between 2014 and 2016, revealing that the figure’s risen from 41% reported in 2008 and 2010.
However, of those who are saving, the amount has increased from £900 to £1,600.
Debt rates among this millennial group have also fallen, from 49% in 2008 to 2010, to 37% in the years after. But the amount of debt is on the rise, standing at an average £1,900, £100 more than reported in 2008 and 2010.
Worryingly, the 10% most indebted owed at least £14,200 in 2014 to 2016, while the 10% least indebted owed £100 or less.
The ONS said there’s a big gap in financial stability as it depends on where people sit on the earnings scale. It found that the highest earning 10% of 22-29-year-olds were paid at least 4.3 times as much per week as the lowest earners in 2017.
And when it comes to savings, the top 10% of those putting money away had at least £15,000, while the bottom 10% had saved less than £100.
Likewise, there are differences in levels of financial debt. Among 22-29-year-olds with debt (37%), the 10% most indebted owed at least £14,200 in 2014 to 2016, while the 10% least indebted owed £100 or less.
Rachael Griffin, tax and financial planning expert at Quilter said: “The fact that homeownership among this generation has dropped is really no surprise, as if savings have also dwindled people simply don’t have enough money for a deposit. Add this to a long period of steadily increasing house prices and you can see how difficult it is for young people to get a foot on the housing ladder.
“There could be some positivity on the horizon though, as this data comes from straight after financial crash, when borrowers found it much harder to get deals without a decent sized deposit. This situation is slowly starting to change and lenders are being more generous. However, house prices still remain high so unless there is significant drop in the property market we are unlikely to see a big boost in homeownership among the younger generations.”
In separate research published today by Prudential, it found that more than a third of under 35s prioritise saving for a deposit on a home instead of retirement.