Priyanka Tiwari
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The young people in Britain today have to contend with increasingly stagnant living standards, flatlining economy, and soaring housing costs, however, they seem to be less pessimistic about their lives than the rest of the population. Unfortunately, the least “gloomy” group carries the heaviest burden; for now, Baby Boomers, in their 60s and 70s today, carry the grim title as the most pessimistic cohort.
Unsurprisingly, there is a gap. According to a survey conducted by The British Retail Consortium, there is an astounding 44 percentage gap between these two age groups in how they evaluate the state of the economy and a striking 36 percentage point gap when it comes to how they perceive their finances. These findings were echoed by GfK’s well-known consumer confidence index. Their research shows the younger, and older, demographic capture the extreme ends of the spectrum – those aged 16-29 marked a net score of plus 6 while the 65+ group survey minus 41.
The results are encouraging for Chancellor of the Exchequer Rachel Reeves during this time when spending is important for sustaining the sluggish economy of the UK. This result comes in spite of the 25 to 34 year old grouping having less than 25% of the wealth that older individuals aged 65 to 74 have, who have enjoyed a long period of increasing value of their properties and stock. An economic paradox which needs to be answered is why are people so young so maddenly positive about the economy?
Researching the emotions driving spending behavior can offer a number of possible explanations. Younger people have very little asset ownership, they are not as affected by the steep increase in interest rates during the past few years. In addition, they have less personal and parental responsibilities, and people from very different age groups receive information in very different ways.
With Gen Z living at home, the stakes are lower. “They are just not exposed to the pressures that surround home ownership and interest rates. If a landlord increases the rent by 10%, it’s easier to move out,” states Richard Lim, chief executive of consultancy Retail Economics.
The British have become accustomed to hitting life milestones later in life. The Office for National Statistics reported that the average age for first-time mothers increased from 23 in 1970 to 29 in 2020. Additionally, the age at which more than half of people owning their own home rose from 32 in 2004 to 36 in 2022.
Neil Bellamy, head of consumer insights at NIQ GfK, mentioned, “A large portion of younger people will have limited financial obligations or families to attend to.” He said, Younger people aren’t too affluent; it is just that as they grow older, they experience life and take on obligations which are often burdensome.”
Gen Z could be in a better position to supplement their income compared to Baby Boomers, as a lot of older people have already retired. The BRC considers that they could be less susceptible to the widespread negativity regarding the economy because so many people avoid conservative media outlets for social media, where they get fed false narratives about the economy.
Kyle Rose, the BRC senior analyst, stated, “It seems like much younger people are optimistic about their finances, which is better for all income brackets, rather than influenced by the highly critical British economy media which is currently is fixating on the British economy issues.”
The BRС says for consumers, confidence has slightly increased in March after the dramatic decline in February when Britons said it was the worst month since the Labour government came into power last year.
It's monitor tracking family forecasts for the economy slightly increased to a net negative 35%, which is an improvement from negative 37%. It displayed that Gen Z anticipates to spend more than the prior three months in all categories while Gen X, aged 44 to 59, were expecting to slash expenses the most.
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