Our research shows that the income of millennials rose 11% from £229bn to hit a record high of £245bn last year while baby boomers are starting to see their income fall steeply.
Millennials (individuals born between 1981 and 1997) saw the biggest increase in earnings of any generation last year, with the average millennial now earning £28,995. In comparison baby boomers (born from 1946 to 1965) saw their incomes fall 3% pa for the last two years from £344bn to £323bn last year (see table below).
The growth in the incomes of millennials is partly due to a greater number of these individuals receiving a university education, meaning they are able to access higher-paid roles earlier in their careers. Older millennials, some of whom will soon be 40, are now entering the higher-earning periods of their careers and are more likely to be in senior, well-paid positions.
The number of high-earning millennials may also be driven up by millennial women being more likely to pursue careers and obtain high-earning roles than women in previous generations.
There is also a substantial number of millennial entrepreneurs who have set up successful businesses such as the sportswear company Gymshark and brewery and brewery and pub chain Brewdog.
The fall in Baby Boomer incomes is largely due to a growing number of these individuals entering retirement. The youngest baby boomers are now 55 years old, meaning a large proportion of the generation now depends on their pension as their primary source of income.
Generation X (born from 1965 to 1981) also saw an increase in their incomes in the past year, earning a total of £408bn, a rise of 5% from £390bn the year before.
Elliott Buss, partner in our Newport office, says: “Millennials are now breaking through the higher income barriers. An increasing number of them are reaching executive and director level and have more cash coming in than ever before.
While it’s good to see millennial incomes rising, it’s tempered by the fact that they face far higher costs, particularly on housing, than those previous generations faced at the same age. They might earn more than their parents did but they are less likely to feel wealthy.
We are yet to see what impact the pandemic has had on millennials’ incomes but we expect that the very youngest staff e are likely going to be harder hit by furloughs and redundancies than older, more experienced employees. Businesses find it hard to change the ‘last in, first out’ tradition.
Millennials’ progress in reaching higher earning levels might not be so smooth in the coming years.”
Millennials incomes continue to rise as Baby Boomers’ earnings fall for first time (£ millions)
