You don’t need an epic catastrophe like a meteorite strike, or another world war, to feel the world’s young are facing existential gloom. The legacy of baby boomers is part of the problem, a trend diagnosed fourteen years ago by then shadow minister David Willetts in his book The Pinch (2010). He argued that the boomer generation, born between 1945-65, had “stolen their children’s future” because their exceptional prosperity made a critical break in the accepted social contract that as a country develops and grows richer, each successive generation will be better off than the one before.

Things have only got worse, not better, for the generation of young people in their teens and twenties. Perhaps the biggest issue facing young people today is housing: astronomical house prices mean that far fewer than in their parents’ generation will be able to buy their own homes. The rise in housing costs has delivered huge windfall gains to the baby boomer generation at the direct expense of those not yet on the housing ladder. Renting is no better, because younger people face some of the highest rents in Europe as well as a profound lack of security since the private rental sector doubled in size over just two decades.

Other knock-on impacts, at a time when real wages have stagnated since the financial crisis, include the fact many young people cannot afford to leave their parents’ homes, let alone move into an area offering jobs with better prospects. Conversely, growing numbers of young families with children are finding they can no longer afford to stay in their homes when tenancies come up, forcing them to move away from their children’s schools and their extended family. And in 40 years or so this generation of renters might not be able to afford their rental payments in retirement, unlike many boomers who have comfortably paid off their mortgages.

Then there’s tuition fees. After Willetts published The Pinch in 2010, he was appointed university minister by David Cameron and tripled the university tuition fee cap, which now stands at £9,250 a year. An undergraduate who started university last September will have to pay off £43,000 on average. With loan repayment terms extended to 40 years before they are written off, many will end up paying effectively an extra 9p tax per pound on their earnings above the repayment threshold. And that is for the privilege of entering a university system that’s ever more academically and socially stratified.

The problem is young people have no way of knowing how much various degree courses at different universities actually contribute to their skills development, and this lack of comparability ultimately compounds class-based privilege and elitism, because employers use the academic selectiveness of certain universities as a proxy for degree quality. Jobs that didn’t require degrees in the past also increasingly demand graduates, so young people feel compelled to invest in a degree just to enter the jobs market, even though a third of graduates don’t go straight into jobs.

Many young people cannot afford to leave their parents’ homes

Those who do are faced not only with high rents but also with the long-term headache of pension plans. While many in the baby boomer generation are entitled to generous final salary schemes, funded by the workers of today, people in their 20s struggle to save for their own future. How can they find the cash for defined contribution schemes when they have to stump up for rent and student loan bills, not to mention trying to save for a deposit?

Added to this is the prospect of a huge financial burden resulting from a fast-ageing society and declining birth rate. In coming decades, a greater proportion of older people will need more health and care provision, with a smaller pool of working-age taxpayers to pay for it. The falling birth rates that characterise all wealthy societies are a product of people either wanting fewer children or not being able to afford the number they’d have liked. It means today’s generation of 20-year-olds will need to pay significantly higher amounts of tax than their parents to maintain the same levels of public service provision, or put up with even worse levels of care (unless falling birth rates are compensated by higher immigration).

Not all young people are equally exposed to financial stress, of course. Some will be cushioned by the significant wealth and assets their baby-boomer parents have accumulated and happily use to pay house deposits, university fees and childcare costs. They’re the lucky ones, but this imbalance will only increase inequality and block social mobility: young people’s job choices will become ever more dependent on where they were born and who their parents are.

The Pinch was hailed as “seminal”, but it wasn’t enough simply to diagnose the problem in 2010, and it isn’t enough today. What’s depressing is that neither political party seems to offer a solution to the fact it is a far, far harder world for someone in their early twenties than it was 30 years ago. Radical reform and intergenerational redistribution is needed to reform housing, universities and pensions, yet politicians seem content to ignore this looming crisis. Meantime there is real – and righteous – anger building among younger groups. Leaving this crisis to simmer until it eventually boils over – as it inevitably will at some point – is totally irresponsible politics.

Sonia Sodha is chief leader writer at the Observer and a Guardian/Observer columnist

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April 2024, Columns, Home Front

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