According to new research undertaken by PwC, the accountancy firm, students starting further education now can expect to be £400,000 worse off when they hit retirement age than their parents. The research by PwC indicates that the savings, pension and property of those starting university, will be £1.23 million by the time they are 65, compared with a combined total of £1.63 million for those born in 1963.
The dramatic decline in economic fortunes the current generation of students are likely to experience is due to a number of factors, including the depressed property market, high tuition fees and lower pension levels. These circumstances stand in sharp contrast to the experience enjoyed by those of their parents’ generation, who benefited from free further education and a booming housing market. The chief economist for PwC, John Hawksworth stated:
“Relative to living standards in society at the time, the ‘baby buster’ generation may end up being up to 25 per cent worse off than their parents’ generation in terms of accumulated total wealth at age 65.”
Hawksworth added that this financial disparity is despite the greater choice and level of services and goods, which is available to this generation, compared to that for the ‘baby boomers’. Students beginning higher education in 2012 are set to be saddled with tuition fee debts totalling around £90,000, alongside a housing market which will make it vey difficult for them to afford to buy. These combined factors have led PwC to label the current generation the ‘baby busters’.