Spotlight: Financial differences between Millienials and Baby Boomers

The term “Millennials”, is used to describe the generation born between the early 1980s and the late 1990s. The term “Baby Boomers” is used to refer to an older generation born between the mid 1940s and mid 1960s. There are stark differences between these two generations and below we highlight the differences in financial attitudes and situations between Millennials and Baby Boomers, which have been shaped by technological advancements, economic conditions, and cultural shifts.
The four areas of financial differences between Millennials and Baby Boomers are (source and figures from BlueTree Savings):

  1. Education costs – The cost of higher education has soared globally over the past five decades. In the UK, Baby Boomers enjoyed grants to cover their university expenses, whereas Millennial students are burdened with student loans. Today, the average student loan debt stands at £45,000 in England, plunging Millennials into significant financial debt before they’ve got a job. Additionally, more than 50% of graduates end up working in fields unrelated to their degree driving some to question whether going to university is even worth it?

  2. Housing costs – House prices for Baby Boomers were around 3 to 4 times the average salary but for Millennials, they are over 8 times the average salary, making it harder for them to save for a downpayment to buy a home. In the past, Baby Boomers could get mortgages with a 0% deposit. Due to this, many Millennials are choosing to rent instead of buy, which is considered the “affordable” option. Without better ways to save, Millennials might never catch up to Baby Boomers in owning homes and having financial security.

  3. Retirement savings – Baby Boomers often stayed with one employer for many years and benefitted from generous pensions on retirement which made for a more secure retirement. As people have started living longer, these benefits have become too expensive for employers to service and therefore Millennials won’t benefit from the same generous retirement perks. They must save more for retirement, and do this on their own, and many lack education on how much they need to be saving.

  4. Spending habits – Millennials tend to spend a lot more in general than Baby Boomers. Clearly if you are spending more then it will be harder to save for a mortgage or for retirement. One reason for this is Milennials seeing homeownership as unattainable and lacking proper education on saving for retirement leading to a lack of motivation to save. There's also more pressure to spend now than ever, with social media advertisement and online shopping available at the click of a button.

However there is another side to the story – the wealthiest Millennials are outpacing their Boomer counterparts. The top 10% of Millennials in their thirties have £300,000 in property wealth, nearly three times what the wealthiest Boomers had at the same age, according to the Financial Times. The sole reason being substantial parental help. The Institute of Fiscal Studies showed that more than a third of young UK homeowners received financial help from family. Among those who received assistance, there are significant disparities: the wealthiest 10% received £170,000 each, while the average gift was £25,000. If this trend continues, the wealth gap among Millennials could become much wider than in previous generations.

Source: ONS

The Noise​

  • After the US inflation print dominated headlines and narratives last week, this week it was the turn of the UK. Data showed that, whilst the trend of cooling UK inflation continued, falling from 3.2% in the twelve months to March, to 2.3% in the twelve months to April, the rate of cooling was less than anticipated, with the consensus estimates being that year-on-year inflation would fall to 2.1%, just 10 basis points away from the Bank of England’s target. Services inflation, including education, hospitality, and culture, is proving stickier falling just 0.1%, from 6.0% to 5.9%, which is one reason for the consensus expectation that a rate cut at the June meeting is unlikely.

  • The continuation of the trend of cooling inflation is likely one of the reasons for Conservative prime minister Rishi Sunak’s decision to call a general election, announced on a rainy Wednesday afternoon in London, claiming that inflation was “back to normal.” This may be hard to digest for much of the electorate with the cost of living crisis still pinching, as consumer prices have risen by more than 22% since 2020, a record beaten in Western Europe by only Germany, Austria, and the Netherlands. This is alongside soaring mortgage bills, taxes at a 70-year high, and a forecast by the BOE that CPI will rise again later in 2024, ending the year around 2.6%.

  • Deloitte’s Gen Z and Millennial survey, published last week, gave profound insight into the sentiment of the businesspeople and leaders of tomorrow. Work / life balance was shown to be a high priority against a backdrop of increasing working hours and productivity. Sustainability and climate change also continue to be at the forefront of the younger generation’s concerns, with 10% already having changed jobs or industries to better align their work with their environmental values, a further 25% planning to do so, and they were shown to be willing to pay more for sustainable products. The sample size of almost 23,000 provides an important indication of current and future sentiments, and the direction of travel towards a more sustainable world economy.

The Numbers

GBP Performance to 23/05/2024

Equity GBP Total Return

1 Week








MSCI Europe






MSCI Japan



MSCI Asia Pacific ex Japan



MSCI Emerging Market






Fixed Income GBP Total Return


UK Government



Global Aggregate GBP Hedged



Global Treasury GBP Hedged



Global IG GBP Hedged



Global High Yield GBP Hedged



Currency moves












Commodities GBP return









Source: Bloomberg, data as at 23/05/2024

The Nuance

From an investment perspective, the key takeaways this week are that headline inflation continues its march downwards, albeit with the caveat that we could be approaching the trough of the inflation chart. Additionally, whilst equity returns are indirectly impacted by political actions, these actions are not the main determinant of how any company’s shares perform. Certainly, given an investment horizon of at least five years and in many cases much longer, short term political decisions, especially when considered in the context of four-year terms for the US and up to five in the UK, should be understood as just one factor among many in a wider analysis of markets. In fact, research by Bloomberg has shown that average annual return is only marginally affected in political election years, and volatility has actually reduced in the period approaching and immediately after elections. This lends credence to the idea that the current political ‘noise’ in the US and UK election years is just that – noise.

Indeed, it is often the longer-term sea changes that can impact markets more profoundly, one such change being the move towards sustainable investment. Despite overwhelming increases in popularity over the past decade, it can be fraught with difficulty for investors as the nascent investment space matures. Issues such as greenwashing, fast-moving regulation, and even market appetite for such investments can be headwinds. As the sustainability space grows and exerts more of an influence on markets and returns, a crucial aspect of navigating these headwinds is education, for companies, asset managers, and investors alike.


All investment views are presented for information only and are not a personal recommendation to buy or sell. Past performance is not a reliable indicator of future returns, investing involves risk and the value of investments, and the income from them, may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.

Any views expressed are based on information received from a variety of sources which we believe to be reliable, but are not guaranteed as to accuracy or completeness by atomos. Any expressions of opinion are subject to change without notice.

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