A survey shows that the youth will not save. We’ve heard it all before, says Grace Gausden
Well, that’s according to a survey by the Policy Institute and Institute of Gerontology at King’s College London. It turns out that older generations felt younger people were spending too much on subscriptions and groceries to own a home.
We’re now officially saying goodbye to people under 40 who spend too much on avocado toast to buy a house. Instead, the younger generation is now being accused of pouring all their money into takeaways and Netflix.
Worryingly, 48 percent of millennials (people aged 25 to 40) agree with this view, suggesting they are still renting or living with their parents because of this type of spending. Such studies pop up regularly, with almost always the same conclusions: Younger people are lazy, overspend on “luxury” and will never own property because of their bad financial habits.
It’s a harmful stereotype that has existed for some time and ignores many societal factors. Plus, if older generations really think that cutting £6.99 a month (Netflix’s standard price) and £20 for a takeaway would be enough to save up for a property, they’re more off the contact than originally assumed.
The average house price is £278,000 in March 2022, according to Sun Life, compared to £4,057 in 1970. Even allowing for inflation, this would be £44,935.90 as of 2021 – a difference of over £200,000.
Another recent report shows that the typical first-time buyer’s price-to-earnings ratio has nearly doubled since the ’90s, and the average first-time buyer deposit has tripled from 5 percent of a home’s value in 1989 to 15 percent in 2019.
In the 70’s you could also get two cinema tickets for less than 90p. And a brand new Mini costs £600 compared to £10,500 today. Of course there are many other factors to consider, but it is an indicator of how times have changed.
Life is obviously very different from the 70’s, 80’s, 90’s and even the noughties. The continuing narrative that millennials can’t control their spending and don’t know how to save is in itself frustrating and lazy.
Anyway, I don’t own a property at the ripe old age of 29 and I don’t know if – or when – that will be a possibility, and I’m certainly not alone. Very few of my friends of a similar age own a house or have anywhere near enough in their bank accounts to buy one anytime soon, but they are all full-time workers who are not “frivolous” with their spending – if some would define it that way it.
Those who have scraped together enough for a property are either in a long-term relationship and therefore can take a down payment as a couple, as well as share all the associated home-buying costs (which are numerous and substantial), or have received a generous lump sum from theirs Parents – which is not possible for everyone.
Add to that the fact that many people have been furloughed or even lost their jobs during the pandemic, which immediately puts them behind when it comes to saving for a deposit. Instead, many struggled to just get by. Other problems younger people face when it comes to finances are tighter lending rules, rising student debt and a lack of jobs, to name a few.
For those lucky enough to be employed in an area of their choice, many of the top jobs are in London or other cities where rents are prohibitively high, often closer to £2,000 a month – depending on where They land .
All in all, reducing an entire generation’s problems to allegedly overspending on groceries and television subscriptions is just wrong and offensive to those who work hard but face very different financial challenges than they once did. What people do with their money is their choice, and constant scrutiny from older generations is becoming a boring and irritating habit.
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