Millennials’ income hits record high

Research conducted by UHY Hacker Young has revealed an 11 per cent jump in the income of millennials, the biggest increase in earning of any generation last year, with the average Millennial now earning £28,995. In comparison, Baby Boomers (born from 1946 to 1965) saw their incomes fall 3 per cent pa for the last two years from £344 billion to £323 billion last year. 

According to the accounting firm, the growth in the incomes of Millennials is partly due to a greater number of these individuals receiving a university education, meaning they are able to access higher-paid roles earlier in their careers. Older Millennials, some of whom will soon be 40, are now entering the higher-earning periods of their careers and are more likely to be in senior, well-paid positions.

The number of high-earning Millennials may also be driven up by Millennial women being more likely to pursue careers and obtain high-earning roles than women in previous generations, UHY noted. 

“Millennials are now breaking through the higher income barriers. An increasing number of them are reaching executive and director level and have more cash coming in than ever before," said Elliott Buss, partner in the firm's Newport office.

But while he is pleased to see Millennial incomes rising, Mr Buss noted that it’s tempered by the fact that they face far higher costs, particularly on housing, than those previous generations faced at the same age.

"They might earn more than their parents did but they are less likely to feel wealthy," he added. 

Conversely, the firm explained that the fall in Baby Boomer incomes is largely due to a growing number of these individuals entering retirement. The youngest Baby Boomers are now 55 years old, meaning a large proportion of the generation now depends on their pension as their primary source of income.

However, Mr Buss cautioned that the impact of the pandemic on Millennials still remains to be see. 

"We are yet to see what impact the pandemic has had on Millennials’ incomes but we expect that the very youngest staff are likely going to be harder hit by furloughs and redundancies than older, more experienced employees. Businesses find it hard to change the ‘last in, first out’ tradition," said Mr Buss. 

"Millennials’ progress in reaching higher earning levels might not be so smooth in the coming years."