Young people in their 20s are facing a tougher start to adulthood than any generation in almost half a century, according to analysis of UK data on housing, employment and wealth carried out for the BBC. More than 40% of 25-year-olds are now living with their parents, their wages have stagnated and employment has fallen, the figures show when compared with key metrics for different generations at age 25 stretching back to the early 1980s.
The findings are reinforced by the experiences of young people and their parents who contacted BBC Your Voice about home ownership, employment and wage pressures, with many saying they were frustrated at being accused by older generations of not trying hard enough. The Institute for Fiscal Studies (IFS) was asked to gather and analyse government data, external, for the first time to see whether this generation really does have it worse, and the biggest change it found was where people in their 20s are living.
How much has home ownership fallen?
Home ownership among 25-year-olds has fallen by two-thirds in 30 years, dropping from 43% in the mid 1980s to just 15%. The main reason is cost: housing is too expensive.
The data shows that housing costs for renters or people with a mortgage in their 20s are the highest they have ever been for them at this age, and those costs now take up a higher share of income than they did for their parents or grandparents.
That does not include the rising cost of running a home, where bills have increased rapidly and hit Gen Z hardest because its wages are lower on average than those of other age groups facing the same price rises. As a result, the number of 25-year-olds living with their parents has risen from 25% in the 1990s to 42% today.
The impact is being felt on a unique scale by Gen Z, but parents say their own lives and futures are also being restricted by having young adults still living at home.
Adam Daytona, 26, moved back home this year to live with his parents. He says:
“I think there's no world where it's normal to be 26-years-old still living at home. It's unfair on me, it's unfair on my parents.
To state the obvious, I'm not going to bring a girl back to my parents' house. So it would have 100% affected that part of my life, which does get me low, obviously.
People say your 20s are the best years of your life and these are the worst years of my life, by far.”
Adam's parents Jane, 57, and Neville, 64, say:
“I think it's very difficult for them. They're not able to buy houses like we were able to.
We were more than happy for him to to come home but obviously, you know, we're getting older and it would be nice to have a place to ourselves.”
Why has employment fallen for young adults?
Employment rates for Gen Z are lower than those of the generations that came before, with the squeeze felt especially among young women who had spent decades gaining opportunity as more entered the workplace.
This current generation of 25-year-olds is the first to see a drop in employment rates, down from 77% 10 years ago to 71%.
For men, the decline is almost as sharp. Men aged 25 are seeing a lower rate of employment than their equivalents in the 1970s, 1980s and 1990s, with employment rates falling from 84% to 76%.
The number of applications before success, the frequency of job losses and the uncertain impact of AI in the workplace mean the entry into working life is getting off to a much rockier start for this generation.
Daisy Edwards, 25, is back home with her parents in Guildford after losing her job in London. She says:
“When I lost that job, I immediately started job searching and that was when it became clear quite how fleeting that London lifestyle was. I think it was pretty instant that I ran out of money.
I'd had a few job interviews but I really committed to job searching. I was applying for maybe five or six jobs a day sometimes.
I think it can really get you down and the longer you are unemployed the more you worry about things, like you don't want to pay to go out.”
Dave, Daisy's dad, says:
“That's a big difference to me having worked in the same company for 32 years. I've only ever had one job interview and I'm still there.
The amount of job applications [Daisy] did was crazy. You had that spreadsheet. And often people don't get back to you. I would not like that.”
Why have wages stalled?
Data shows that 25-year-olds who are in work are still likely to be earning more than their parents were at that age, and much more than their grandparents received. But after strong wage growth for 25-year-olds from the 1980s through to the early 2000s, reaching an average of £28,526, that progress stopped.
Jonathan Cribb, deputy director of the IFS, says:
“The big picture is stagnation,”
“It's not that these people are worse off than those that came before them, but it's that they're no better off and that progress has stalled.”
People born between 1987 and 1991 entered the workforce just after the financial crash and saw a sharp fall in earnings. They are the group who received the lowest average wages of any 25-year-olds over the last three decades. Since then, wages for 25-year-olds have gradually recovered, almost to the level they were 20 years ago.
Those waves of economic shocks, along with the pandemic and cost of living crisis, mean wages for 25-year-olds are only just above £28,000 now after inflation is taken into account. That stagnation hits people hardest at the start of their careers.
There is also a social expectation that each generation will do better than the last, and when reality and expectations do not match there is inevitable disappointment.
Rachel Diamond, 23, moved from her family home in Oldham to Portsmouth to follow her dream job as a graduate engineer. She earns in the early £30,000s and says:
“I was quite lucky when I got my job straight after uni. So I've kind of done everything right, but still I'm not saving any money from my paycheck, like months and months, just because it's so expensive with renting and bills. I don't think people realise how expensive it is to rent.
That's the thing, like council tax, you only get 25% discount, so that's expensive on my own. Again, that's a choice, living on my own, but still.”
Rachel's dad Paddy says:
“When I started out in work I was in a similar situation to Rachel. I moved away from home and I lived on my own because I didn't know anybody where I was moving to, and certainly it was hard for me, and it seems to be, equally as hard, if not, well, probably harder for Rachel.
I bought my first flat when I was in my early 20s. I was earning £20,000 a year and my first flat was £36,000.”
Is there any hope for the future?
The hope is that Gen Z will still reach these milestones, perhaps just a little later, and that salaries and employment rates will recover as this group moves into their 30s.
For this generation, recognising the new terrain they are facing means comparison is impossible. Many have adopted a new mindset, holding society's goals more loosely and learning to thrive on shifting sands.
That is something Shahida, 22, has adopted through her job hunt. Before landing her dream role in the Ministry of Justice, she says the search for work “took a lot of resilience”.
“It did result in a lot of tears and a lot of self-doubt at the beginning and I think that's completely normal and it's part of the process.”
Shahida says she hopes she does not take her job for granted, but she is “happy to say that I work in a place that I really enjoy”.
Get in touch
Have you been affected by the issues raised in this story?
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