The UK 2015 Intergenerational Fairness Index (IF Index) – Young people’s prospects declined more than 10% since 2010

The 2015 Intergenerational Fairness Index (IF Index) reveals a 10% deterioration in the prospects of younger generations relative to older generations between 2010 and 2015. The annual Index reports a further one point decline year on year, taking the Index from 135 points in 2014 to 136 points in 2015.

The spike in the Index during the last government is attributed mostly to rising levels of government debt, the cost of the State Pension and unfunded public sector pensions, together with a continuing decline in the affordability of housing for the under-30s when comparing house prices to average incomes.

The number of new homes built is pitifully low, at around 140,000 in 2014; the low levels of housebuilding since the start of the recession have not been seen since 1946 and are an important factor affecting house price increases.

The situation is compounded by the stagnation of incomes for 22–29 year olds between 2010 and 2014, which means that average house prices in 2014 are now more than ten times median annual incomes. The dream of a home of one’s own is ever further beyond the reach of many young people.

According to the Office of National Statistics, retirees have seen their incomes increase by 5.1% between 2007/08 and 2011/12, while working households saw typical incomes fall by 6.4%.1 The Institute of Fiscal Studies (IFS) echoed the upward trend in pensioner incomes versus younger generations, reporting that the incomes of people in their 20s fell by 12% between 2007/8 and 2011/12 while incomes of those in their 60s and 70s have continued to rise since the recession.

Chosen excerpts by Job Market Monitor. Read the whole story at  Young People’s Prospects Declined More than 10% since 2010