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Money

Here’s why millennials will never save twice their salary by 35

*Reaches for calculator. Starts sweating*

Retirement saving and pension planning

A tweet with a little financial advice went viral this week when it claimed “by 35, you should have twice your salary saved, according to retirement experts”.

The Money Milestones feature on marketwatch.com, a financial website, became the subject of ridicule when it cited expert claims from Boston-based investment firm Fidelity Investments that by 30 “you should have a decent chunk of change saved for your future self” and that by 35, you should have twice your salary.

https://twitter.com/sbmeunier/status/996487798512332800

https://twitter.com/theurbanologist/status/996364281947049986

While it was shaken off with a few *fun* tweets, the situation for most millennials is that they’re getting poorer faster than other generation. The reality is they will likely never own a home, never mind save twice their salary.

Under 30s are struggling financially, with a decade’s worth of data from the University of Manchester research revealing they’re more likely to be living in poverty than older generations.

The researchers cited university tuition fees and the increasing cost of housing coupled with real pay as factors in relative deprivation increases in under 30-year-olds.

Relative deprivation is defined as a standard of living below levels enjoyed by the broader society, to a high enough extent to introduce hardship, quantified across income, employment, education and skills, health and disability, crime, barriers to housing and services, and living environment.

Professor Evan Kontonpantelis from the University of Manchester said the housing market is arguably the most important interpretation of the findings.

“The average house in England and Wales costs 7.6 times the average annual salary in 2016, up from 3.6 times in 1997,” he said. “And these large increases in house prices over a relatively short period of time have provided a large advantage to the older generation, for who it was much cheaper to get on the property ladder.”

There’s more. A Resolution Foundation report found that 40 per cent of young people currently live in privately rented properties by the age of 30, with half likely to still be renting in their 40s and a third still paying landlords by pension age.

It’s just unfeasible, frankly, and the sooner we can start changing our system and putting a stop to this discourse of unattainable saving, the better.

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