Partner Article

25-49 more financially fit

New analysis by economists at PricewaterhouseCoopers LLP (PwC) shows that some generations are being impacted much more severely than others due to changes in employment, household income and wealth.

While all age groups have experienced rising unemployment since spring 2008, there has been a much greater rise in the rate of unemployment for 18-24 year-olds. The youngest workers also saw a much sharper fall in average earnings growth in 2008 than other age groups.

The younger age group also suffered the largest increase in redundancies in the year to April 2009, while redundancy rates decreased in higher age groups.

The PwC analysis suggests that older people may have lost out relative to younger households in terms of the net income effect of interest rate cuts since last autumn, which have on average favoured younger borrowers over older savers.

Meanwhile, people in the 25-49 age range tend to have the largest average mortgages and are therefore likely to benefit most from recent cuts in interest rates. Those aged over 50 are most exposed to falling equity and house price fluctuations due to having more accumulated wealth tied up in their homes.

Steve Denison, Northern chairman for PricewaterhouseCoopers LLP, said: “While no age group is fully immune from the adverse effects of the downturn, our analysis suggests that people in their mid-20s to late-40s will on average have relatively better financial prospects through the recession than younger or older generations.

“This age group will be financially fitter because they have a relatively lower exposure to unemployment and if they loose their jobs then they have a greater probability of finding another one. They may also benefit the most from low mortgage interest rates while older savers will lose out.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .