Key facts
- Home ownership among 25-year-olds has decreased significantly, from 43% in the mid-1980s to 15% currently.
- Housing costs now represent a larger portion of income for renters and mortgage holders in their 20s.
- The proportion of 25-year-olds living with their parents has increased to 42%, up from 25% in the 1990s.
- Employment rates for 25-year-olds have seen a decline, particularly for young women.
- Wages for 25-year-olds have stagnated, averaging just over £28,000 after inflation adjustments.
Young people in the UK are facing significant challenges in starting their adult lives, with data indicating they have it harder than previous generations. Analysis by the Institute for Fiscal Studies (IFS) for the BBC reveals a dramatic fall in home ownership among 25-year-olds, from 43% in the mid-1980s to just 15% today, primarily due to escalating housing costs that consume a larger portion of their income.
This financial pressure has led to a rise in 25-year-olds living with their parents, now at 42%, compared to 25% in the 1990s. The situation is compounded by stagnant wages, which have seen little growth beyond an inflation-adjusted average of £28,526 since the early 2000s. This stagnation is particularly impactful at the start of careers, creating disappointment as expectations of generational progress are unmet.
Employment rates have also dipped, marking the first decline in female employment rates since the 1980s. Men aged 25 are also experiencing lower employment rates than their counterparts in previous decades. Factors such as increased job application competition, frequent job losses, and the emerging impact of AI are contributing to a more challenging entry into the workforce.
Personal accounts from individuals like Adam Daytona, who moved back home at 26, and Rachel Diamond, a graduate engineer struggling with rent and bills, underscore these statistics. They express frustration with societal perceptions and the difficulty of achieving traditional milestones like home ownership. While the outlook suggests potential for later achievement of these goals, the current generation is navigating unprecedented economic terrain.