Latest Report Shows Growing Chasm Between Young And Old Despite Improvements
A new report has shown the wealth gap between the young and old is growing, with lawyers warning the repercussions will be felt in both directions.
The latest findings from the Resolution Foundation show that while the decline in home ownership appears to be slowing, with rates increasing from 7.9% in 2016 to 9.2% in 2018, skyrocketing prices and trouble saving a deposit remains a huge barrier for young people.
It also found that 18-29 year olds are the only age group with lower non-housing spending now than twenty years ago, in stark comparison to baby boomers whose non-housing spending had sharply increased by 37% in the same period.
The report notes an ‘implicit social contract’ which is now under strain due to the 2008 economic crisis and an ageing population, with specialist lawyers at law firm Irwin Mitchell warning the best way to fight the growing chasm is to plan ahead.
Expert Opinion“The latest findings from the Resolution Foundation are very much in line with what we’re seeing with our client instructions and with what the wider British population is facing.
“What concerns us is that the widening wealth gap will affect all generations and not just the young, particularly as we face uncertainty with social care. The long-awaited social care green paper seems to have been delayed indefinitely while we face the prospect of young people losing their inheritances to rising care costs.
“Older generations will also find it difficult as young people struggle to support themselves, let alone their parents should they need it. While they enjoy the fruits of their labour over the years with increased spending, the care problem won’t be solved anytime soon.” Sarah Phillips - Head of Lifetime and Estate Planning in the Thames Valley
Irwin Mitchell experts recommend asking a solicitor about the best way to prepare for the future as concerns grow over intergenerational wealth.
Sarah continued: “There are a number of ways to plan ahead, such as putting funds into a trust, which would go a long way in preparing for the future - particularly if parents are concerned for their children’s future or even their own later life planning.
“Estate planning is also a massive factor for parents and grandparents to consider so they can make sure they’re not paying unnecessary tax when they pass down assets to children or grandchildren.
“It is unthinkable that younger generations will be left in the lurch, but it is unfortunately the reality we are facing even with improvements to social care provision. Preparing now will make all the difference later down the line.”