Young adults in 2018 financially weaker than twenty-somethings in 2008

Official figures paint ‘scary’ picture of millennials’ financial affairs

Home ownership among 22- to 29-year-olds has plummeted by 10 percentage points in a decade (Getty)

Today’s young adults own less property, are less likely to have any savings and are less resilient than twenty-somethings a decade ago.

Figures out this week from the Office for National Statistics show home ownership among 22- to 29-year-olds has plummeted by 10 percentage points since 2008 to only 27 per cent.

They’re also less likely to have money set aside. In just four years, between 2010 and 2014, the number of twenty-somethings with any savings at all dropped from 59 per cent to 47 per cent.

But the numbers also show a large divide between the haves and have-nots, even among such young adults.

The highest earning 10 per cent of 22- to 29-year-olds were paid at least 4.3 times as much per week as the lowest earners in 2017.

Those with savings now have significantly more than they would have done a decade ago – an average of £1,600, up from £900, though the number of savers in this age group has dropped.

The top 10 per cent of savers has at least £15,000, while the bottom 10 per cent has saved less than £100.

Meanwhile, the 10 per cent most indebted owed at least £14,200 in 2014 to 2016, while the 10 per cent least indebted owed £100 or less.

“The figures provide glimpses of positivity about the finances of the UK’s millennial generation, however, these glimpses are shrouded in an unenviable fog of limited savings and significant debt,” says Rachael Griffin, tax and financial planning specialist at wealth management firm Quilter.

“The data shows 37 per cent of young people now have financial debt compared to 49 per cent between 2008-2010. While this is something to be pleased about, these figures do not include student loans, which a substantial proportion of this population will face.

“While on the face of it [the figures on saving rates] is worrying, the statistic doesn’t explore the fact that pensions auto-enrolment now means younger people are putting away money for a retirement, even if arguably at very low levels.

“Furthermore, the data suggest there is a strain between saving for later life and earning enough to be able to save in a more liquid manner. This lack of accessible savings could mean that any unexpected expense could push this group into a tricky financial situation which would then result in them having to enter into debt or being reliant on the bank of mum and dad.”

But financial strength is also closely linked to emotional resilience.

A recent study into the overall financial resilience of under-35s found that a quarter of 18- to 24-year-olds and half of 25- to 34-year-olds simply aren’t financially robust. In other words they would struggle to recover from a financial shock or loss of income.

A third of 18-24-year-olds, and a further third of 25-34-year-olds do not feel emotionally resilient, according to the research by Zurich.

“It’s a tough time financially for consumers, but particularly for young people,” says Rose St Louis of Zurich UK.

“Soaring house prices and increasing rent costs are making owning your home a pipe dream.

“While wage growth is starting to pick up, months of low wages coupled with high inflation and soaring university debt, is impacting how resilient young people feel with their finances.”

But it’s not all doom and gloom, there are steps young people can take to improve their finances.

Feeding a small amount each month into a stocks and shares ISA or a pension fund is a sensible way to build a healthy sum over the years. Similarly, making the most of government products when saving for a first home, such as a Help to Buy ISA or LISA can bring huge benefits over time.

“Younger generations need to have it instilled in them that having a healthy savings account is essential,” urges Griffin. “Research shows that, like many behaviours, our attitudes to money are shaped at a young age. The Money Advice Service has shown that many key financial habits are set by the age of seven.

“It’s incredibly important that the government gives thorough consideration to the introduction of financial education onto the primary school curriculum. Doing so will help tackle financial illiteracy and show children early on the merits of saving, and hopefully avoid a situation where we find in another 10 years a generation of 18- to 29-year-olds with even less in their savings accounts.”