Evan Davis, a presenter on Radio 4's PM, delves into the question of whether the late baby boom generation, born in 1962, is the luckiest in history. He explores this through the lens of three key areas: higher education, pensions, and housing.
In higher education, Davis highlights the stark contrast between the student loan system of today and the subsidies received by his generation. While younger graduates face substantial debt, Davis benefited from a maintenance grant and tuition coverage. The system, he argues, is designed to make the growth of graduate numbers possible while being fair to non-students. However, the personalized tax aspect of the loan system, where better-off graduates subsidize less well-off ones, has angered some students.
Turning to housing, Davis acknowledges the unearned advantage of buying a flat in London in 1988, which he later sold at a loss but still upgraded to a bigger flat with substantial capital gains. The timing of the housing market transition from high interest rates to low interest rates played a crucial role in his luck. However, he notes the inequality within the baby boom generation, with London and its catchment area experiencing more significant gains than other regions.
Pensions, according to Davis, are where the baby boom generation has been particularly fortunate. They benefited from defined benefit pension schemes, where employers contributed a substantial portion of their salary, ensuring a decent pension. In contrast, millennials and Gen Z employees now accumulate savings in personal pension pots, with employers contributing significantly less. Davis acknowledges the disparity and the sense of injustice felt by his younger colleagues.
Davis concludes by emphasizing that the luckiness of some late baby boomers should not be generalized to the entire cohort. The grand disappointment of the last two decades, marked by declining per capita economic growth, has contributed to a shared sense of material deprivation. Restarting the growth engine is essential to address intergenerational equity concerns.
