People born in the 60s last to enjoy higher living standards in UK, data shows

Those born in the 1960s were the last generation in Britain to experience a broad rise in living standards, the first official data on the subject has revealed.

Following a recommendation in a House of Lords report called “Tackling intergenerational unfairness”, government statisticians analysed the incomes of people born between 1920s and 1990s. They found that up until those born in the 1970s, each generation tended to be better-off than people born a decade earlier were at the same age.

“Stagnating income for more recent generations compared with their older counterparts is likely to be influenced by several factors. For instance, over recent years, wages and salaries have fared worse than their historical trends,” the Office for National Statistics (ONS) said on Wednesday.

In the 10 years since 2004, pay per head fell by on average 0.1 per cent each year, whereas in the preceding decade it rose by 3.9 per cent every year, the ONS noted.

The release uses inflation-adjusted data on household incomes after taxes, including private pensions and cash benefits provided by the state.

The results are not uniform. For example, people born in the 1990s had a higher household income at the age of 27 than those born in the 1980s did at the same point in their lives, but the reverse was true at the age of 23.

But, overall, the figures point to a broader trend and confirm an observation made in the House of Lords report.

“Pay progression has slowed for younger generations. They are unlikely to enjoy the same generation-on-generation income gains that their predecessors received,” it said.

The ONS data also shows that tax and benefit reforms over the years have tended to benefit later generations.

On average, people of all generations pay more in taxes than they receive in benefits throughout most of their working lives. Their net contribution peaks in their mid-50s when they are less likely to have school-age children and therefore use education services.

But, within that overall pattern, the ONS has spotted some changes. For example, those born in the 1950s paid on average £3,000 per year more in tax than they received in benefits when they were between 25 and 34 years old. Meanwhile, those born in the 1980s paid only £1,100 per year more in taxes than they received in benefits at the same age.


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