How do living standards compare across generations?

Do you think your generation is doing better than your parent’s generation? How about your children’s generation? Would you expect to be earning more, be more likely to be employed, or have higher housing costs at a given age if you were born 15 years earlier, or 15 years later?

We use household survey data to study the experiences of different generations at the same age, with results presented in 2024–25 prices (accounting for inflation). We focus on young adults aged around 25 (an average of those aged 23–27) up to those born in 1997–2001, but the graphs are interactive so you can look at other ages too, or compare cohorts across ages. This work builds on and updates previous IFS analysis and work from the Resolution Foundation on intergenerational differences in income and wealth.

The current generation of 25-year-olds are less likely to be employed than other recent generations

Until recently, the overall employment rate of 25-year-olds was broadly stable across recent generations of young adults, with the female employment rate rising (especially between those born in the late 1950s and the 1970s) and male employment slightly falling. However, employment rates among men and women born around the millennium (1997–2001) are lower than those of 25-year-olds in previous generations. Their overall employment rate of 74% is down from the 77% average rate observed at age 25 for those born between 1972 and 1996. This is likely to be connected to the rise in the NEET (not in education, employment or training) rate which has been seen among 16- to 24-year-olds since late 2022.

Median earnings and incomes for young people have not grown for two decades

Median (middle) pre-tax earnings at age 25 for those in employment grew rapidly between the 1957–61 generation (£19,900 per year in 2024–25 prices) and the 1977–81 generation (£28,500), all of whom were aged 25 prior to the 2008 financial crisis. Since then, median earnings for those in paid work at age 25 – like those across the wider economy – have stagnated, with the 1997–2001 generation having a very similar level of pay (£28,000) to those born two decades earlier.

If we look at median family disposable income1 – measured after taxes and benefits and by adding together the incomes of partners in couples – we see a similar story: steady growth across generations for those born in the late 1950s to those born in the late 1970s, then relatively little change thereafter.

Thus, while today’s young people do not seem to be worse off in earnings and income terms compared with prior generations, neither have they experienced the kind of growth that previous cohorts had become used to.

More young people live with their parents than ever before

Around a quarter of those born between the late 1950s and the mid 1970s were still living with their parents at age 25. Since then, the fraction has risen quite sharply and stands at 42% for the 1997–2001 generation when they were 25 years old.

Correspondingly, the proportion of 25-year-olds who are homeowners has fallen sharply, from 43% of those born in the late 1950s to mid 1960s to 16% of the 1987–91 cohort. It has changed little since then, with only 15% of the 1997–2001 cohort owning their own home at age 25. The key shift in recent years has therefore been a decline in young people renting and further increases in the numbers living with their parents.

The burden of housing costs for young people is similar to recent generations, but higher than for those born several decades earlier

Because a growing share of young people live with their parents – who often are responsible for housing costs – comparing housing costs across cohorts for all young adults could be misleading. We therefore focus on young adults who are not living with their parents at age 25. This is still not a perfect comparison – as more young adults live with their parents, the typical characteristics of those not living with them may change.

The figure below shows the median level of housing costs across generations, as well as the share of family income that goes on housing costs.2

The figure suggests that housing costs are higher at age 25 for the 1997–2001 generation than for any previous generation. This is partly a result of this data point being measured in 2024–25, which saw a sharp rise in private rents. Earlier years (such as age 24, measured in 2023–24) still suggest high housing costs, but a less dramatic difference for this generation. The overall picture that emerges is that housing costs at age 25 for the 1997–2001 generation are at a comparably high level to those for recent generations, and significantly higher than for older generations.

Examining the share of income spent on housing costs gives a similar though less sharp pattern. The share among 25-year-olds rose from 17% for the 1957–61 cohort to 23% for the 1982–86 cohort. Since then, it has bounced around somewhat – but there is no evidence of any decline in the burden of housing costs for young adults from the historically high levels we have seen for those born since the early 1980s.

So, how are young people doing?

Taken together, these findings do not point to a rapidly deteriorating picture in economic outcomes for young adults. On many outcomes, they suggest that young adults today on average have relatively similar outcomes to those born in the 10 or 15 years before them – similar pre-tax earnings, disposable incomes, housing costs and homeownership. However, they are more likely to live with their parents and less likely to be employed.

But the bigger picture is one of continued stalled progress in the labour market in particular, combined with continued difficulties with high housing costs. In earlier generations, young people could expect to have better labour market outcomes than those born before them, rather than merely treading water. That this is no longer the case reflects a broader slowdown in productivity and earnings growth that has afflicted the UK as a whole since the 2008 recession.

This analysis has been produced exclusively for the BBC, who have interviewed a wide range of young adults on their experiences to complement this new research.