The millennial generation – those who were born between the early 80s up to 00s – are predicted to have paid off their mortgage, finished shelling out for their children and retired at the age of 70 in the best case, according to research carried out by Age Partnership.
Mortgages taken out by baby boomers typically took 33 years to pay off, and they had to face much higher interest rates of up to 16 per cent. But house prices have soared over recent decades, and an average house priced at £220,000 will take 40 years to pay off for millennials, inspite of much lower mortgage interest rates of around 4 per cent. In addition to that, the research found that 50 per cent of a millennial's income is spent on bills.
Starting a family now comes some five years later than it did in 1980. The average age of a first-time mother in 1980 was 23.5 years old, according to the research, whereas millennials are waiting until they reach on average 28.6. The cost of raising a child who reached adulthood in 2003 was £140,398, whilst the costs for millennials who have a child begins at £222,458.
Further, the children of millennials are going to live at home longer (until they’re 30) – with the average parent reaching the age of 58 before their offspring have moved out, compared to 51.5 for baby boomers. This further increases the cost of having children for millennials, from an already hefty 25.2 per cent of their lifetime income.
Crucially, retirement for baby boomers comes at age 59.6, whilst millennials won't retire until age 68 or later.
Tim Loy, chief executive at Age Partnership, commented: ‘Retirement can be an opportunity to live the way you have dreamed about all your working life, whether that be taking up an interesting hobby, or travelling the world.
‘Juggling finances as we come across necessary obstacles in our lives can be challenging, which is why it’s important for people to have access to information which will help them to make informed decisions about their future.’
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