Following a Scottish Widows retirements report published last year, Reme Holland wrote about ‘Generation Rent’ and the long term consequences of renting without making provision for retirement accommodation.
A new report published by the Resolution Foundation’s Intergenerational Commission calls for urgent action to address the housing challenges faced by young people as they look forward to a lifetime in the private rented sector (PRS).
The report suggests that a third of UK millennials (those born after 1981) will never own a home, half will be renting in the insecure PRS environment into their 40s and one in three will still be renting by the time they draw their pensions, creating an inadequately planned for explosion in housing benefits.
It’s not a good time for millennials. Other reports suggest that this generation won’t be able to enjoy the legacy of their wealthier baby boomer forbears until well after they need it to buy property and bring up children. By and large they are stuck with comparatively depressed incomes, job scarcity and declining home ownership – not a very optimistic outlook.
The report calls for urgent action to address these difficult housing issues, including a three year rent freeze, more open-ended secure tenancies and more effective taxation on foreign properties, second homes and empty properties. However, there are things that individuals can do to plan for a more secure and stable financial future with or without owning a home.
Looking more closely at intergenerational financial planning could accelerate the transfer of wealth to the millennial generation as well as solving a potential Inheritance Tax issue for the older generation. As Chartered Financial Planners we help individuals and families to create, protect and grow the wealth they have earned and plan a trouble free future.