Young adults in their 20s are navigating significantly more challenging circumstances than previous generations at the same age, according to analysis of UK government data conducted by the Institute for Fiscal Studies for the BBC. The research compared key economic metrics across generations stretching back to the early 1980s, examining housing, employment, and earnings for 25-year-olds.
The most dramatic shift has occurred in housing prospects. Homeownership among 25-year-olds has declined sharply from 43% in the mid-1980s to just 15% today. Housing costs now consume a larger share of income for young people than ever before, with rental and mortgage payments at historically high levels relative to earnings. Additionally, utility bills and living expenses have surged, disproportionately affecting younger generations with lower average wages. These pressures have resulted in 42% of 25-year-olds now living with their parents, up from 25% in the 1990s.
Employment rates have also deteriorated for this cohort. Women aged 25 have experienced their first-ever decline in employment rates, falling from 77% a decade ago to 71% currently. Men have similarly seen employment drop from 84% to 76%, reaching levels not seen since the 1970s and 1980s. Job seekers report needing to submit numerous applications to secure positions, with added uncertainty from technological disruption in the workplace.
While gross wages for working 25-year-olds remain higher in nominal terms than previous generations, real wage growth has stalled. After substantial increases from the 1980s through the early 2000s, wages have remained essentially flat, with those entering the workforce around 2008 experiencing particularly steep losses. Current average wages for 25-year-olds stand just above £28,000 when adjusted for inflation, effectively unchanged from two decades earlier.
The cumulative effect of these challenges contradicts societal expectations that each generation will achieve greater prosperity. Young people report feeling pressure to meet traditional milestones like homeownership while facing objectively harder circumstances than their parents and grandparents encountered.
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