Half of young people don’t believe they’ll ever be able to retire comfortably

More than half of young people in the UK don’t believe people like them will be able to retire and live comfortably later in life, according to new research.

Analysis showed low wages and benefits are failing to help young people stay afloat during the cost of living crisis, putting their hopes for the future in jeopardy.

Inflation, the national insurance hike, changes to student loan payments and unaffordable essentials are affecting the physical and mental health of 16- to 24-year-olds, the report said, with trends showing they’re likely to get poorer as they get older and financial safety nets fall away.

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A survey of nearly 1,200 young people revealed that nearly half (47 per cent) cannot make ends meet each month on their current incomes, or are only just managing.

“Young people across the UK face a toxic cocktail of inadequate work and safety nets, high levels of debt, and a rising cost of living,” said Fran Landreth Strong, lead author of the report and researcher for the Royal Society for Arts, Manufactures and Commerce (RSA).

“As they get older, many lose the support networks they once had and for too many young people, economic security has to be sacrificed in the name of independence.”

A “worrying number” of young people are facing financial precarity, she added, with “significant impact on their mental and physical health and their confidence about the future.

“Without proper action, we risk creating a ‘generation precariat’, unable to invest in their futures and move confidently into adulthood.”

More than 40 per cent of young people people in their circumstances could soon find it impossible to live independently without support from family or friends.

Young workers struggling to get by on wages which have not kept up with inflation are finding the welfare system does not offer them security either, and are feeling the effects of the cost of living crisis acutely.

Revati, a 20-year-old who participated in the project as a young adviser, said young people are “increasingly stuck between surviving and living” while the mechanisms designed to create economic security become “increasingly inaccessible” to younger generations.

Owen, another young adviser who worked with researchers, said: “Some young people are concerned about their immediate future in the very short term, and some are worried they will not be able to take a step onto the housing ladder or plan their financial futures.

“However, nearly all young people are concerned about some form of their future economic security,” the 23-year-old added.

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Analysts said in-work poverty and precarious jobs are becoming an increasing risk to young people’s wellbeing, with 56 per cent of young workers – who are more likely to work in the gig economy or on zero-hour contracts – still struggling to afford the basics. 

Under-23s are not entitled to the “national living wage” – the minimum wage set by Westminster for older workers – and instead are paid less. Apprentices can earn less than £5 per hour.

“The current generation of young people living in the UK are facing difficult challenges: from navigating the world of poor-quality employment to living precariously in the private rental sector,” said Martina Kane, policy and engagement manager for the Health Foundation’s Healthy Lives team. 

“These all have an impact on their long-term health.

“Whilst the solution to economic insecurity is complex, taking action will help provide young people with stable foundations for a healthier adult life.”