Schrodinger's millennial: our problems are no easier or harder than our parents – they’re just different

1 November 2019

Edmund Greaves says life isn’t easy whether you’re a ‘boomer’ or young adult


Pitting the fortunes of ‘boomers’ against those of millennials is a common practice in the media now  – but the challenges faced by both generations are not easy to compare.

In October, Moneywise, alongside its parent company interactive investor, published a detailed report on the state of the nation’s retirement finances – The Great British Retirement Survey. Its findings were very interesting, and I can highly recommend having a read.

One statistic that was thrown up in the results was that 51% of our respondents think that younger generations have it tougher than older people. I think this is a useful statistic as it demonstrates just how polarised the topic is. I would contend that us young’uns are no better or worse off than our forebears, just that we face a different set of issues.

It is true that it is tougher for young people to get on to the housing ladder these days, as demonstrated by the rising age of first-time buyers.

But people buying houses 40 years ago had to contend with something just as challenging – they could buy a house but they also had a stonking interest rate on the mortgage that sent their payments spiralling – that is if they had any kind of employment to pay for it.

We’re often told that young workers today are disadvantaged because they increasingly have to take zero-hours contracts, which strip them of stability, employer pension contributions and other workplace benefits. But while this is true, many will have benefited from this flexibility and the opportunity to work remotely, which didn’t exist 40 years ago.

However, some things used to be better for workers. Until the last decade or so, workers were likely to benefit from a final salary pension scheme. You know, one of those that had minimal risk attached to it and guaranteed a fat sum for the person in receipt.

Such generous schemes hardly exist today, unless you’re in certain FTSE 100 companies or parts of the public sector. And I wouldn’t bet on the government being able to honour those pension promises in 40 years’ time.

Nor, for that matter, maintain the state pension in its current form by the time I hit the age of 70. Good job I’ve got my modest defined contribution pension, eh?

Millennials are frequently told that we should be saving more to fund our retirements.

We’re told that our aspirations of homeownership and being able to retire one day are doomed because we would rather have another holiday in Ibiza or the latest iPhone than stick our money in a savings account where it will earn a measly 1.46% return.

While rates are this low it’s not hard to see why some young people prefer to see their favourite band at Glastonbury than earn a few pennies of interest on their savings.

I think that rather than complaining about the spending habits of younger people, older folk should be thanking us.

When millennials buy iPhones, it ultimately reflects in the share price of Apple Inc or whatever buzzy tech firm is top of the pops. In turn, that contributes to the growth of vast swathes of pension portfolios.

If we stopped buying PlayStations, clicking the Facebook ads or googling the nearest Apple store, guess what would happen? That’s right, the economy would suffer and everyone’s investments and savings would fall in value.

I recently saw an extraordinary piece of research that suggested that the past 10 years of sluggish economic growth in the West was because millennials were too parsimonious. That we weren’t spending enough. So which is it?

It is the Schrödinger’s millennial approach – simultaneously spending too much and too little.

We benefit from a world of technology, consumerism and access to all the goods and services one could imagine and hope to own.

When we buy them, we’re helping to fund everybody’s retirements. Can we please all stop with the finger-pointing and agree that our problems are no easier or harder – they’re just different?