30th July 2026
Young adults today have similar earnings, incomes and housing-cost burdens to people their age 10–15 years ago but worse employment rates, far higher rates of living with parents, and no real improvement in living standards compared with earlier generations. The IFS argues that the core problem is two decades of stalled productivity and wage growth, not a sudden collapse in young people’s fortunes.
A generation stuck in neutral
The Institute for Fiscal Studies’ latest analysis paints a clear picture: young adults in the UK — especially those born between 1997 and 2001 — are not dramatically worse off than those just a decade older, but they are no longer experiencing the steady improvements that earlier generations took for granted. Living standards have flatlined, and the reasons run deeper than any single policy or economic shock.
Today’s 25‑year‑olds have an employment rate of 74%, down from 77% among cohorts born between 1972 and 1996.
This drop is small but significant — and closely linked to the rise in NEET rates (young people not in education, employment or training) since late 2022.
Employment trends — The long‑term pattern of rising female employment and slightly falling male employment has now tipped into a broader decline for both.
Earnings & Income: Twenty years of stagnation
Perhaps the most striking finding: median earnings at age 25 have barely moved since the late 1990s.
Late‑1950s cohort at 25: £19,900
Late‑1970s cohort at 25: £28,500
1997–2001 cohort at 25: £28,000
In other words, young adults today earn almost exactly what their counterparts earned 20 years ago, once inflation is accounted for. Disposable family incomes show the same pattern: growth up to the late 1970s cohorts, then stagnation.
Income stagnation — The IFS links this to the UK’s broader slowdown in productivity since the 2008 recession.
Housing: Higher costs, fewer homeowners, more living with parents
Housing is where generational differences become most visible.
Living with parents
1950s–70s cohorts at age 25: ~25%
1997–2001 cohort at age 25: 42%
This is the highest share ever recorded.
Homeownership
Late‑1950s cohort: 43% homeowners at 25
1997–2001 cohort: 15% homeowners at 25
The collapse in young homeownership has stabilised — but at a historically low level.
Housing costs
Among young adults not living with parents, housing costs are higher than for any previous generation, driven partly by sharp rent rises in 2024–25. The share of income spent on housing has hovered around 23% since the early 1980s, with no sign of easing.
Housing burden — The burden is not collapsing, but it is stuck at historically high levels.
So, are young people worse off?
The IFS’s conclusion is nuanced:
Young adults today are not dramatically poorer than those born 10–15 years earlier.
But they have not enjoyed the improvements earlier generations saw — especially those born in the 1950s–70s.
Employment is slightly weaker.
Housing independence is far lower.
Earnings and incomes have stalled for two decades.
The real story is not collapse — it’s stalled progress.
Why this matters
Earlier generations could expect to earn more, live more independently, and enjoy rising living standards compared with their parents. Today’s young adults are treading water, and the IFS argues this reflects a long-term slowdown in productivity and wage growth across the entire UK economy.
This is not just a youth issue — it’s a national one.
Read the full IFS report HERE