![Pinterest](https://pinterest.com/pin/create/button/?url=https://uknews.evprotec.com/how-cheap-money-broke-the-contract-between-young-and-old/&media=https://uknews.evprotec.com/wp-content/uploads/2022/11/TELEMMGLPICT000315547530_trans_NvBQzQNjv4BqNUHzxaamNmHDqK-YksWRz2o-yMLyYquKCawpyDOW254.jpeg&description=Stagnating wages and a growing wealth gap means more people are relying on inheritance to amass their fortunes. This means millennials are increasingly relying on the wealth of their parents to determine how much money they have. "Inheritances will, in time, transfer some of the wealth to today's younger cohorts, but increased longevity means that this won't happen until very late in life," the IFS says. New wealth taxes could help to redress the generational wealth imbalance, says Joyce, but reforms to the current system would be better. He highlights that council tax bands in England are still based on values from April 1991 – almost 30 years ago. "There needs to be a recognition that we do undertax high value homes," he says, adding that the current system is like "having a lower rate of VAT on a Ferrari than on a Mini". Without action, the problems will not only persist for future generations but risk getting worse. The IFS said shutting down the economy during the pandemic had "very large impacts" on children's education that will be felt for decades to come. Some are struggling with speech, while knowledge not gained in the classroom will hit pay packets later . "Lost schooling risks reducing earnings down the line," the researchers said, while "the likelihood of young people experiencing labour market disruption was higher for the most disadvantaged", which will deepen inequalities and reduce social mobility. The research ends on a sombre note: "This all leads to a remarkably uncertain time for the state of the economy and household living standards, but this is clearly a different direction from that of recent decades, and perhaps the start of a new phase in inequality."){kind=link}
Low interest rates mean millennials are on track to have the lowest levels of home ownership since the generation born in the 1930s
For many those who came of age during the Eighties, it was a time of upward mobility.
People who bought a house during the decade have reaped the benefits of an upward march in property prices since then, after Thatcher’s tax and regulation cuts triggered an economic boom.
But those who were born during the 1980s have faced starkly different fortunes. The UK is becoming a less socially mobile country to grow up in and those born in the eighties and decades since have been the hardest hit, according to the Institute for Fiscal Studies (IFS).
The think-tank says rising asset prices and a “long-term stagnation in earnings” means the “economic prospects of young generations are struggling to match, let alone exceed, those of their predecessors”.