Published On: Wed, Feb 28th, 2024

Millennials to become ‘richest generation in history’ in ‘enormous’ wealth transfer | Personal Finance | Finance

Millennials are set to become the richest generation in history, a new report has shown – although not for several decades.

It comes as a result of the over £2.5 trillion held in property by previous generations will be passed onto after death. The huge transfer of wealth could mean that for many millennials, the previously impossible-seeming dream of owning their own home could finally become a reality around the time that they retire.

The ramifications of wealth boost of millennials – defined as being born roughly between 1980 and 1994 – are “enormous”, said Liam Bailey, global head of research at the estate agency Knight Frank. The stats were revealed in the agency’s annual Wealth Report, published today.

It will come when the last of the property-equity-rich generations pass on their assets – including the silent generation (born from 1925 to 1945), the baby boomers (1946-1964), and the oldest cohort of Generation X (1965-1979).

Mr Bailey said that so much wealth being in the hands of millennials and Generation Z beneath them will substantially impact society in a way that reflects differing attitudes – particularly towards the environment.

He said people will seek out greener homes, more environmentally friendly goods, and more sustainable investments.

Analysis of home ownership suggests that the property market is currently being propped up by richer parents helping the younger generations to afford the sky-high cost of their first homes.

New figures from Savills suggested that last year, 61 percent of first-time buyers were only able to sign on the dotted line as a result of financial help from living baby boomer parents, a 15 percent increase on the year prior and a new record.

A total of 173,000 buyers were funded in part by their living parents in 2023, being offered a combined total of £10.6billion in help.

In some parts of the country – particularly the southeast of the UK – average property costs more than ten times more than average income.

Savills last year released analysis that showed over-65s have £2.588 trillion in equity tied up in property and only £147 billion in mortgage debt. Meanwhile, the under-35s face a very different picture altogether, with £306 billion of equity and £317 billion of debt.

At the same time, stats suggest the number of ultra-high net worth individuals (those with a net worth of more than $30 million (£24 million) rose globally by 4.2 percent in 2023.

They were particularly prominent among emerging economies – for instance, Turkey saw a 9.7 percent rise in the number of its own super-wealthy.

Numerically speaking however the US saw the most additional ultra-high net worth people, from 208,560 to 225,077, or a 7.9 percent increase from the previous year.

For the UK, the figure was less dramatic, with a 3.1 percent increase from 22,379 in 2022 to 23,072 last year.

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