Millennials have not had it easy. Most of the cohort of those born between around 1980 and 1996 entered the workforce in the years following the global financial crisis, when youth unemployment was sky-high and the graduate job market was at rock-bottom.
Older millennials who went to university were hit with £3,000-a-year tuition fees; the younger half of the generation had to shell out three times as much. For older groups of students, by contrast, university was completely free.
Economic research has repeatedly suggested that British millennials are at risk of being the first generation who are less well off than their parents, a remarkable reversal of the intergenerational compact which has driven our society for decades.
The Labour Government should be aware of the plight that those now in their thirties and forties have faced. After all, Sir Keir Starmer owes his landslide general election win in large part to them. In 2024, Labour was backed by well over 40 per cent of voters in those age groups, with the ruling Conservatives picking up just 15 per cent or so, a resounding rejection of the status quo bequeathed by the Tories.
But quietly, this administration is bringing in policies which will further degrade millennials’ quality of life.
Figures which were slipped out, unpublicised, in the wake of the recent Budget show it is precisely this cohort which will suffer the most from Rachel Reeves’s tax raid on pension saving.
The Chancellor announced that the use of tax-free “salary sacrifice” schemes to pay into a pension – that is, having money deducted directly from your wages and diverted to a pension pot – would be limited to no more than £2,000 a year. She said in her Budget speech that “the greatest benefit” from the existing policy went “to higher earners or to those in the financial services sector putting their bonuses into pensions tax-free, while those on the minimum wage or those whose employers don’t offer salary sacrifice don’t benefit at all”.
The Government’s own data make it clear, however, that it is not only City fat cats who are making use of tax-free pension saving. A total of 3.3 million people will now have to pay tax on their salary sacrifice, according to the Treasury’s estimate, with an average additional cost of £84 in the first year after the crackdown takes effect in 2029.
And millennials are more likely to be caught in this trap than any other age group. In fact, a majority of those affected – 52 per cent – will be aged between 31 and 50, roughly mapping on to the millennial generation. That is significantly larger than their share of the workforce.
On other policies, Reeves has stepped in to protect age cohorts that are in danger of being unfairly hit. For example, she has offered pensioners a carve-out from new curbs on the amount that can be put into cash ISAs. No such targeted help is on offer for millennials.
Instead, at the last Budget tax thresholds were frozen, stamp duty changes didn’t materialise to free up homes millennials could raise families in and council tax reforms, which might have rebalanced payments toward homeowners who have seen their property value rocket in the last three decades, didn’t arrive either.
At this point, members of Generation Z might well point out that they too have their troubles. Many of them had their time at school or university, or their first years in the workforce, brutally interrupted by the curbs brought in to manage a pandemic that posed relatively little direct threat to them. And it is not exactly a perfect time to be starting a career, in the teeth of a persistently sluggish economy.
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But there are signs, thankfully, that in some ways the rising generation may get an easier ride as they get older. For example, the era of soaring house prices which made it so hard for millennials to become homeowners appears to be over. And Government policies to subsidise childcare should make it less brutally unaffordable to bring up kids in high-cost cities.
This country has already had its first millennial prime minister (just about) – Rishi Sunak was born in 1980. He did little to help his own generation, instead preferring to promise goodies for baby boomers in his ill-fated general election campaign.
Would geriatric millennials Wes Streeting, Angela Rayner, Zack Polanski or Robert Jenrick be more generous to their cohort as PM? Perhaps – but that will come as little comfort to those who right now see themselves being used as a cash cow, yet again, by a political establishment that sees no need to rebalance the generations.
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