People in their 30s suffering the worst from financial crisis - earning £2,000 less than they would have

People in their 30s today have been the hardest hit by the financial crisis, new research has found.

Wednesday, 12th September 2018, 9:24 am
Updated Wednesday, 12th September 2018, 10:42 am

Analysis of the impact of the 2007/08 shows people who are aged between 30 and 39 now are earning £2,100 a year less than people of the same age group in 2008 - a drop of 7.2%

The research, done for the BBC by the Institute for Fiscal Studies, shows that on average people's real annual wages in the UK are £800 lower.

Those in their 20s are suffering a decline of 5%, compared with the drop for the over-60s in work of 0.7%, or £130.

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At the time of the financial crisis in 2008, the average wage was £24,100. In 2017, it was £23,300.

Paul Johnson, director of the IFS, told the BBC: "The average earnings of those in their 20s and 30s fell especially sharply in the immediate aftermath of the recession, perhaps as employers were able to cut starting wages more than wages of those already in work.

"While this age group has seen earnings grow in recent years, it has not been "enough to make up for initial losses."

He added: "Pensioners have done much better than younger people on average. In part this is because they are less reliant on earnings and so haven't suffered from falls in earnings."

Mr Johnson said the Government had chosen to protect the state pensions and other benefits received by pensioners.

He continued: "We should never stop reminding ourselves just what an astonishing decade we have just lived through, and continue to live through.

"The UK economy has broken record after record, and not generally in a good way.

"Record low earnings growth, record low interest rates, record public borrowing followed by record cuts in public spending.

"On the upside employment levels are remarkably high and, in spite of how it may feel, the gap between rich and poor has actually narrowed somewhat, but the gap between old and young has grown and grown."