Young people in their 20s are facing a tougher start to adulthood than any generation in almost half a century, according to an analysis of UK data on housing, employment, and wealth conducted for the BBC.
The findings, which compare key metrics for different generations at age 25 since the early 1980s, show that more than 40% of 25-year-olds are now living with their parents. This figure has risen from 25% in the 1990s to 42% today. The Institute for Fiscal Studies (IFS) gathered and analysed government data for the report, identifying housing as the biggest change.
The home ownership rate for 25-year-olds has plummeted from 43% in the mid-1980s to just 15%, primarily due to high costs. Housing expenses for renters or those with a mortgage in their 20s are at their highest for this age group, consuming a larger share of income than for previous generations. Additionally, rising bills are impacting Gen Z, who have lower average wages.
Employment rates have also seen a dip for Gen Z. For 25-year-old women, employment has fallen from 77% ten years ago to 71%, marking the first decrease since the 1980s. Men aged 25 are also experiencing lower employment rates compared to their age-equivalents in the 1970s, 1980s, and 1990s, with rates dropping from 84% to 76%.
While 25-year-olds in work generally earn more than their parents did at that age, wage growth has stagnated. After significant increases from the 1980s to the early 2000s, reaching an average of £28,526, wages for 25-year-olds are now only just above £28,000 after adjusting for inflation, similar to levels 20 years ago. Jonathan Cribb, deputy director of the IFS, stated that "the big picture is stagnation."