Lowest Wage Growth Since the 1920s
Real pay will be lower in 2021 than in 2008, according to a report by the Institute for Fiscal Studies. Average real earnings have already dropped by c. 7% since 2007, with further pain to come amid sluggish GDP growth. The biggest loser will be low income families and young people – the report shows a divergence since 2007 of income for 22-30-year-olds (-7%) and those aged 60+ (+11%). The growth segmentation of haves and have-nots in the UK is generally a cause for concern. A typically more frugal older generation has benefitted from a strong housing market, and economic growth over their lifetime, which is not being replicated for the financial crisis / Brexit generation. Combined with greater longevity, and slower consumption, wealth is not being recycled back into the economy as readily as it might. Growth in healthcare, retail aimed at the silver pound, and equity release products are all likely.