Coronavirus lay-offs and rising housing costs mean that many millennials are still financially worse off.
Millennials are now earning more than their parents did at their age, but may still feel poorer, analysis claims.
Research by accountancy UHY Hacker Young found the income of millennials – those born between 1981 and 1997 - rose 11% from £229 billion to hit a record high of £254 billion last year.
In contrast, baby boomers, born from 1946 to 1965, have seen their incomes fall 3% from £344 billion to £323 billion last year.
UHY Hacker Young says the growth in incomes of millennials is partly due to a greater number getting a university education, meaning that 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 positions.
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The firm adds that the number of high-earning millennials may also be driven up by women being more likely to pursue careers and obtain high-earning roles than those in previous generations.
In comparison, a growing number of baby boomers are entering retirement, with the youngest now 55 years old, which is pushing down their earnings.
Elliott Buss, partner at UHY Hacker Young, 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.”
Buss added that younger millennials’ incomes are likely to be hardest hit by furlough and job cuts. He adds: “Businesses find it hard to change the ‘last in, first out’ tradition.
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“Millennials’ progress in reaching higher earning levels might not be so smooth in the coming years.”
Victor Trokoudes, co-founder of the automated savings app Plum, says millennials face a vastly different landscape to baby boomers but more have become enthusiastic about investing since spending dropped during the pandemic.
He says: “Gone are the days of a job for life, a house at 22 and a comfortable state pension on the horizon.
“If anything, this makes them even more concerned about the future and preoccupied with how best to build their financial resilience for the long term.
“As with other areas of their lives, they embrace technology when looking to build their wealth.”
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