Generation gap: Over half of over 55s claim they could financially withstand another lockdown while younger workers struggle and see wealth hit
- Over half of those aged 55 or over said their finances would hold up in a crisis
- But the pandemic has left younger people even more worried about money
The ‘baby boomer’ generation feel more confident in their ability to withstand the financial shock of another pandemic-driven lockdown than their younger counterparts, new findings suggest.
Over half of people 55 or over said they were in a similar financial position to last year and that their current finances would enable them to manage daily expenses in the event of further turmoil triggered by an event like a fresh lockdown.
But, just 20 per cent of 18 to 24-year-olds expressed the same sentiments regarding the potential financial fallout involved, a Quilter and YouGov’s survey found.
Stark differences: Over half of people 55 or over said they were in a similar financial position to last year
Ten per cent of people surveyed aged 55 or over said their current finances would not allow them to manage expenses in another lockdown, regardless of whether or not they were better or worse off financially compared to last year. This compares to 20 per cent of 18 to 24-year-olds and 21 per cent of 25 to 34-year-olds, according to the findings.
Four in ten under 35s could not cope financially in another lockdown, the data suggests.
The pandemic has had a marked financial impact on many younger people and their employment status, with a high number working in sectors most affected by lockdowns, like hospitality and retail.
Official Government figures suggest that around 4.3million people aged between 18 to 34 were placed on furlough at some stage, representing 40 per cent of total claims. This compared to 1.9million people 55 or over, Quilter said.
Quilter thinks there is a potential gap for older generations to help younger ones in the fallout from the pandemic.
Ian Browne, financial planning expert at Quilter, said: ‘The Covid-19 pandemic has clearly had different consequences for different cohorts, with some experiencing harsher impacts than other. Clearly younger generations have suffered to a greater extent than their older counterparts and it is concerning that this group is more likely to say they are not financially ready for another lockdown.
‘However, what the data does show is a great number of people that could clearly benefit from conversations around intergenerational wealth planning. Many baby boomers have accumulated wealth over their lifetime and have benefitted from rising asset prices. Millennials and generation Z have not been so fortunate and have found it harder to get on the property ladder or are paying exorbitant costs in rent.
‘If just a portion of this wealth were to trickle down to younger cohorts it would go a long way to ensuring more people feel financially fit for another lockdown. Doing this through gifting is a great way to help families make the most of their financial assets, and for people to enjoy seeing their life savings helping younger generations to prosper.’
Previous research conducted by wealth management group Quilter in 2020 found that 48 per cent of ‘baby boomers’ said they could afford to give money to family members before they passed away.
While this may be the case, it is important that no one feels pressurised into giving money away to others, or stretches their finances more than they want to and can afford.
Plus, it is important to note that the mounting cost of living crisis is affecting people across all age groups, including people both in and out of work.
According to findings published by the Resolution Foundation last month, 2022 is set to the ‘year of the squeeze’, with real wages on track to be no higher next Christmas than today, and households facing a typical income hit of around £1,200 a year from April as a result of tax rises and soaring energy bills.