Miércoles 21 de Junio de 2006, Ip nº 158

We're struggling in generation Y
Far from living a gilded life, twentysomethings are crushed by debt and working incredibly hard

The twentysomethings you see every day juggling their iPods, BlackBerries and digital-camera phones might seem to have it all. On the face of it Generation Y, those aged between 18 and 27, enjoy a good education, have vast job opportunities and spend their evenings at bars and restaurants. They are the feckless generation, caught up in the here and now and blissfully ignorant of the realities of adulthood.
On these pages last week Tom Cox, a typical Generation X-er, bemoaned his and other thirtysomethings’ plight, sandwiched between the baby boomers “speeding off on a Harley-Davidson and spending our inheritance” and the younger Generation Y, who are “loud, savvy and always having fun”.

Almost as soon as the paper appeared my phone started ringing with friends who had taken offence at Cox’s portrayal of Generation Y.

They, like me, work incredibly hard for little money and feel they are unfairly portrayed in the media, which are more interested in the culture of binge drinking. We Y-ers are lucky in many respects but being twentysomething today is not a bed of roses; the mountain we must climb is alarmingly steep.

A good friend, Cate Robertson, 24, graduated from Durham University in 2003 with a £10,000 student loan and a £2,000 overdraft. She moved to London because she dreamt of working in publishing and had to get a credit card because she couldn’t survive on her salary alone. “At first I lived at friends’ houses, but eventually I had to start renting and I didn’t have enough for a deposit, so I put that on a credit card,” she says.

Cate’s story is a familiar one. NatWest reported that graduates are, on average, £12,640 in debt through loans, overdrafts and credit cards, which will take 15 years to repay. More than 20% of those aged 18-30 run out of money before their next pay packet, according to the Financial Services Authority. Yet Generation Y are warned they need to save for the future. Prudential, the financial services group, recommends that young people begin saving by the time they reach 26, otherwise they will spend the rest of their lives trying to catch up.

To Cate the idea of putting money aside towards a home or a pension is risible. “I can’t see the day when I can afford a house,” she says. “I’m trying to pay off my credit card, but even then I still have £6,000 of debt, plus money I owe my parents and my overdraft, which is now charging interest. There is a pension scheme at work but I’ve chosen not to join it. I need every penny.”

Last summer the think tank Reform dubbed today’s young the iPod generation: insecure, pressured, overtaxed and debt-ridden. It highlighted house prices and the need to pay more tax to meet the demands of an ageing population as the main problems.

Professor Nick Bosanquet, an author of the report, says the picture has got worse since the pension bill, which ignored young people’s precarious finances. “The government has raised the amount young people have to save for their own pension and the amount they also have to save to pay for the ageing population,” he says.

Currently there are 100 workers supporting every 27 pensioners aged over 65 but by 2060 this figure is set to increase to 48 pensioners per 100 workers.

This bleak picture is taking hold of a once gilded generation; they are no longer able to live like their parents did in their twenties. “Sometimes it’s easy to forget I’m just 25 years old. The burden is immense,” says Mark Lewis, who supplements the money he earns through his day job in a gallery by working as a waiter in the evening. “I’m trying to live for today but I have to be so disciplined with my money.”

A recent survey of 2,200 undergraduates revealed 15% of students drink only about two pints of beer a week. Another report found that 91% of those aged between 17 and 24 don’t go out all night on a Friday because they hate wasting their weekends being tired and hungover.

Manchester graduate Claire Harding, 24, says her generation cannot afford to party till dawn. “Sure, at university you go out a lot. But nowadays I’m more likely to share a bottle of wine with a friend. We don’t get wrecked because we can’t afford to.”

David Willetts, Tory education spokesman, says the crisis in university finance, the pension crisis and the pressures of the housing market are high up the policy agenda but they are seen as three separate problems. “If you look at it socially they are the same problem,” he says. “It is unique in our history, having these three burdens together. Generation Y have a much rougher deal than their predecessors.”

Willetts argues that we are experiencing a clash of ages. “A generation ago, Tony Benn called for a fundamental shift of power and wealth to working people. What we now see is a fundamental shift in power and wealth to the older generation.”

Baby boomers (those over 50) own four-fifths of the nation’s wealth, with pensioners alone having assets of £500 billion. Most people’s parents are probably living in a house with a large amount of equity because of its rise in value over the years. Whereas the number of first-time buyers has fallen by a third since 1999, as the cost of the average house has increased from £96,000 to £184,000.

All this points to one thing: we are living in a topsy-turvy world. The baby boomers can afford to make themselves feel young, while Generation Y are getting old before their time.


  11/06/2006. Times Online.