From property to pensions millennials are used to missing out, but it’s time for us to take a stand, says Sara Benwell
For millennials, like me, who grew up as the Harry Potter books were being released, excitement at each new release was tempered by the thought that we were missing out on something. We loved the books, but we wanted the magic. More than a few hours were spent thinking, ‘when will my Hogwarts letter arrive?’
Of course, we knew it wasn’t real, but at the same time the underlying fear was that there were other kids out there who were getting their letters. You couldn’t help but wonder – am I a muggle?
This might actually have been a good primer for life. As it turned out millennials have had to get used to missing out on things other people take for granted. And the sense that everybody out there is used to one way of living, while we’re locked out of that world – living in one that is altogether less exciting - has become the new normal.
Home-ownership is one classic example of this. For generations, Britain has been a country where owning your own house or flat was not just aspirational – but achievable. Sadly, for many millennials, this is no longer true. In 1991, 67% of the 25 to 34 age group were homeowners. By the financial year ending 2014, ONS data showed this had declined to 36%.
Every element of pensions is riddled with inter-generational unfairness”
Another area where millennials have got the poor end of the bargain is pensions. This isn’t just because we do not have access to the cushy DB arrangements that the generations before us enjoyed, but because we’re also paying through the nose for it.
In fact, every element of pensions is riddled with inter-generational unfairness. The companies we work for are so crippled by DB deficits that they can’t afford to give us much in the way of DC contributions.
Meanwhile, the generous triple-locked state pension is paid for by current workers’ national insurance contributions. This would be fine if anyone thought for a second that we’d get the same state pension when we come to retire – but with organisations and experts such as the OECD saying it’s unsustainable, it’s hard to imagine we’ll be so lucky.
A report from the Centre for Policy Studies back in 2014 predicted under-45s would face tax hikes and a later retirement age to pay for older generation’s state pension. Those unlucky enough to be under 35 were warned to expect the state pension to be scrapped altogether.
Of course, all of this isn’t just unfair, it’s downright dangerous. Huge cohorts of people who reach state retirement age, but can’t afford to retire could easily cripple government, the economy and businesses alike.
Unless something changes, the Gen Y muggles might be forced to start a revolution”
People often have talked about how defined contribution has shifted all the risk away from the employer to the employee – but that isn’t strictly true.
We’ll either try to go on working (assuming we can) leaving businesses unable to hire new talent, or we’ll become a burden to the state.
This problem isn’t insurmountable, but it requires people to save significantly more than they are now. It probably also needs a shift towards risk-sharing approaches like defined ambition. Without significant education, and possibly even legislation – that doesn’t seem likely.
The burden of making this fundamental inequality in the financial world right is on employers, governments and regulators – largely made up of people from the lucky generations that went before us.
In Harry Potter the witches and wizards keep themselves secret from the muggle world – scared of what might happen if the ordinary people find out they exist. But here in the real world, we know we’re being treated badly. Unless something changes, the Gen Y muggles might be forced to start a revolution.