Baby boomer wealth contributing to inequality, thinktank says

The baby boomer generation’s acquisition of wealth is adversely affecting later generations’ ability to do the same, a report from thinktank Resolution Foundation has concluded.

The report said those born in the two decades following the Second World War, many of whom would go on to buy property during the housing boom throughout the 1990s and 2000s, did not gain their wealth by being any more skilled than their successors.Wealth inequality has increased as a result, according to the research conducted by policy analysts Laura Gardiner and Conor O’Grady.

The thinktank estimates that as much as £2.3trn was created for those owning property during the rise in prices, a figure which younger generations cannot compete with despite saving as much as their predecessors.

The average price of a residential property mushroomed to three times the price between 1993 and 2012-14

“Britain’s pre-crash property boom created a huge, unearned and largely tax-free £2.3trn housing wealth windfall for those old enough and lucky enough to be home owners at the time,” Gardiner said.

“But while the property bubble hugely benefited many of Britain’s baby boomers, it has also driven generational wealth progress into reverse by pricing younger people out of home ownership.”

The average price of a residential property mushroomed to three times the price between 1993 and 2012-14, with the report finding that 82% of housing wealth increases during that time could be attributed to the boom.

Gardiner added that the increase in property inequality was a “concern” for living standards.

“Property, pension and financial wealth can provide security and opportunities for families, as well as a decent income in retirement. The failure of younger generations to accumulate wealth in the way that earlier generations have been able to is therefore a huge living standards concern for us all.”