Today we’ve published a comprehensive briefing paper which details key statistics for a generation much talked about and arguably misunderstood… millennials.
Millennials have been called the unlucky generation, the ‘me me me’ generation and even, on occasion, the lazy generation. But who are they? And what are the defining issues for this generation?
Who are millennials?
Millennials are typically cited as being born between the 1980s and the 1990s. We have categorised them as those now aged between 25-34 years old. They entered adulthood around the turn of the 21st Century.
There are roughly 8.82 million millennials in the UK, representing 13.6% of the total population.
Millennials are more urban and diverse than older age groups. 1.69 million millennials live in London, comprising around 20% of the capital’s population.
Around 17% of millennials are in a non-white ethnic group, which is higher than the same figure for the UK population as a whole (13%).
Around 26% of millennials were born abroad. 13% of millennials were born in another European Union country. The proportion of millennials born abroad is larger than for other age groups in the UK.
Population of the UK by age and country of birth, Q3 2016
Chart showing population of the UK by age and country of birth
Source: Labour Force Survey, Q3 2016
Millennials are a highly educated generation. Around 40% of people in their late 20s and 30s have graduated from university in the UK.
What are the key issues facing millennials?
As millennials advance in their careers there are some key issues which loom large over the generation’s ability to ‘get on’. Average real wages have stagnated post the 2008 recession, hitting millennials particularly hard, and high housing costs are making it difficult for them to get on the property ladder.
How has wage growth (or lack thereof) affected millennials?
Median weekly earnings for full-time employees aged 22-29 were 5.1% lower after adjusting for inflation in April 2016 compared to 2008.
Resolution Foundation analysis shows that millennials depart from the usual pattern where each generation has higher average pay than the one preceding it. Median pay at age 22 for those born in 1988 (the middle of the millennial age range) was below that of both those born in 1968 and 1983 at the same age.
The 2008 downturn has had an effect on the wages across age cohorts but the Resolution Foundation argued that this was most concerning for millennials because “pay gains are usually most rapid at the beginning of careers – reducing or removing early career progression can have long-lasting scarring effects.”
How has the housing crisis affected millennials?
Of households headed up by a Millennial in 2016, 59% were renting and 38% were homeowners. This is a much lower rate of home ownership than twenty years previously: in 1996, 61% of people aged 25-34 owned their own home.
A high prevalence of renting is not surprising given the difficulties faced by first-time buyers. In the immediate aftermath of the 2008 recession the number of loans made to first-time buyers decreased sharply. The number of loans in 2008 was 47% lower than in the year before.
Although lending has picked up since 2012 the size of the average first-time buyer’s mortgage has increased relative to incomes. The chart shows the trend in income multiples (the ratio of the average mortgage advance to the average recorded income of borrowers). Following a relatively stable period in the 1990s, the 2000s saw a sharper increase in income multiples. The average income multiple for 2016 was the highest recorded at 3.5.
Figures are for mortgage lenders in the UK.
Source: Council of Mortgage Lenders, Industry Data Table ML2
Want to know more…?
Our paper Millennials elaborates on these issues and delves into many more, looking in detail at the demographic make-up of the generation. The paper shows the percentage of millennials by constituency, the sectors they work in, and looks at wealth accumulation across generations.