Millennials will be poorer than their parents – Institute for Fiscal Studies
According to the report, which was published Thursday, Britain also suffers from huge levels of wealth inequality, with 9 percent of households having no assets at all while 5 percent are worth more than £1.2 million.
Those on the lowest incomes, the poorest 1 percent, have negative net wealth of £16,000, meaning their debts are higher than any assets they own.
Meanwhile the richest Brits, constituting the top 1 percent, have assets worth over £2.4 million. The report found that seven out of 10 households own their home outright or had secured them with a mortgage, while three out of 10 live in rented property.
The IFS said in its report that the median wealth of a British household is £172,000.
The report shows the current generation of young people between the ages of 18-30 are more financially insecure than the previous generation, prompting questions over how the government can address rising levels of inequality.
“Even with … increases in average wealth, working-age households are at risk of being less wealthy at each age than those born a decade earlier,” said David Innes, the IFS economist who was the author of the report.
The IFS research follows numerous reports that present a bleak future for Britain’s current crop of young people.
In October, the Equality and Human Rights Commission (EHRC) published a report titled, “Is Britain Fairer?” which concluded that the wealth gap between young people and previous generations is widening.
“[In terms of] employment rates, housing and pay, we found that young people were significantly disadvantaged relative to older people — and the trend is widening,” said Laura Carstensen, an EHRC commissioner.
The IFS said the Gini coefficient of Britain is 0.65, with 0 equating to total equality and 1.0 meaning the total wealth of a country is in the hands of one person. The Gini coefficient measure for income stands at 0.4.
The study examined trends in wealth between 2006-08 – the end of the boom – and 2010-12, which correlated to a time when the country was stuck in a deep recession, with weak recovery leading to a house-price slump.