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Generation Gap

18 Feb 2011

Cost of adulthood 55 per cent higher than a generation ago

YOUNG Britons need to earn 55 per cent more if they are to live the lifestyle their parents took for granted at their age, new research reveals. 

The study from first direct reveals the average Briton in their mid-20s would need an annual salary of £39,720 to buy a house, pay for a wedding and have their first child - all milestones their parents' generation had passed at that age. 

This far outstrips today's 20-somethings' actual current average earnings of £25,500 by some £14,000, or 55 per cent. 

And for today's 25-year-olds to buy a house at the same level of affordability as their parents enjoyed at their age, they would need to earn £44,600 pounds - a 74 per cent increase. 

These financial pressures are forcing Britain's youth to delay key life stages. Whereas three in 10 of their parents were married and on the property ladder by 25, money worries mean the average young Briton today does not expect to pass these milestones until their mid-30s. 

One in five (22 per cent) had to postpone marriage or feel they will have to, with one in four (24 per cent) delaying having children. Nearly a third of young Brits (31 per cent) are considering not having children at all because they cannot afford to do so. 

And far from living a carefree existence, more than three in five (62 per cent) young Britons admit money worries are preventing them from making the most of their youth.

 

Generation debt

Three quarters of Brits (76 per cent) think today's young people are the most financially pressured in history, and two thirds (65 per cent) say they will come to be worse off than today's 50-year-olds when they reach the same age. 

Those aged under 25 have an average of £11,467 debt from their university days -- but, prudently, have made paying this off their number one priority. 

Yet one in three (35 per cent) admit that they need to borrow more just to make ends meet - the under-25s' most common reason to get into debt. As a result, four in 10 young Brits (40 per cent) expect their personal debt to increase over the coming years - even though the same proportion also expects to earn more (38 per cent). And this could rise further as more than one in two (58 per cent) expect their cost of living to increase this year.

 

Youthful ambition

Although the older generation may like to think otherwise, one in five young Britons (20 per cent) claim to be more financially savvy than their parents - with the research showing how these financial pressures can have a positive side. 

Close to half (45 per cent) are more determined to achieve career success whilst one in four (23 per cent) are working hard to get on the property ladder. 

first direct Head of Marketing, Paul Say, said: "Today's young people appear to be rising to the challenges of their generation. One in three (34 per cent) say money concerns make them more determined to succeed in life and be more considered about life decisions (68 per cent).

"Many may have been forced to delay life milestones but this is making them plan ahead more and think carefully about the decisions they make." 

The research forms the forward-looking fifth and final chapter of first direct 's Colourful Lives report - a detailed look at the nature of modern British society. Previous chapters have examined eccentricity, happiness, British hobbies and creativity, and the world of work.

 

Ends

Related video

http://www.newsroom.firstdirect.com/videos/first_direct_interviews_financ 

For more information or to request a copy of the first direct 'Colourful Lives' Report Chapter Four, please contact: Melanie Corbett on 020 3451 9438 Melanie@brando-world.com or Emily Phillips / Emily@brando-world.com 

 

Notes to Editors:

Findings reported here are taken from the fifth and final chapter of the first direct Colourful Lives Report by the Future Foundation commissioned by first direct to mark its 21st birthday. 

The fifth and final report places the current generation of young people under the spotlight, asking whether burgeoning financial pressures are having an impact on their lifestyles and life choices. 

This report draws on bespoke research conducted online, in September 2010, among a nationally representative sample of 1,000 Britons aged 16 plus. Additional research was conducted via ICM in December 2010 among a nationally representative sample of 2,000 Britons aged 16+.

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