They discovered that older millennials, now in their early to mid-30s and therefore turned 25 before the financial crisis hit, were the first workers to earn less than those born five years before them.
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Resolution Foundation built on earlier research showing that British people aged 65 to 74 now hold more wealth than the entire population under 45, even though there are more than twice as many people in the younger age group.
The finding comes just days after new Prime Minister Theresa May warned of a “growing divide between a more prosperous older generation and a struggling younger generation”.
It highlights that inequality will continue to grow for younger millennials who have entered the jobs market after the financial crisis.
A new report by the British think tank Resolution Foundation found that millennials in the United Kingdom are on track to be the first ever generation to record lower lifetime earnings than their parents.
It shows that even an optimistic scenario, in which the future pay of millennials improves rapidly and follows the same path as the baby boomers, their lifetime earnings would be around £890,000.
The research defined millennials as under-35s – people born after 1981 – and found they had taken the brunt of a recent pay-squeeze compared to “Generation X” and “Baby Boomers”.
Around 42 per cent of millennials manage to become home owners by the age of 30.
The Resolution Foundation have launched an Intergenerational Commission to explore growing inequality between generations, with members including Kate Barker, former member of the Bank of England, Carolyn Fairbairn, director-general of the CBI and Paul Johnson, director at the Institute of Fiscal Studies. “But it is rising up the agenda with the prime minister, politicians of all parties, business leaders and others rightly identifying it as a growing challenge”, Resolution Foundation executive chair David Willetts said.
“Millennials are spending an average of £44,000 more on rent in their 20s than baby boomers did”, the report warns.
Torsten Bell, director of the Resolution Foundation, added: “Generational inequality risks becoming a new inequality for our times, and nowhere is that clearer than on pay”.
Figures by think tank the Resolution Foundation suggested the younger a millennial is (it’s a pretty wide definition – anyone between 15 and 35), the less they’re likely to have earned during their 20s.
David Willetts, a former Conservative cabinet minister who chairs the Resolution Foundation, said: “This is about taking seriously the social contract between the generations that underpins our society and state, and recognising that everyone is anxious about the future of younger generations”.
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According to the Resolution Foundation, this intergenerational gap in asset ownership is something that contributes towards “short-term disappointment and longer-term living standards challenges” among millennials.
