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Young people hit hardest by recession

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The young have been hit much harder by the recession than older people, according to a report by the Institute of Fiscal Studies (IFS).

According to Living Standards, Poverty and Inequality in the UK: 2014, young people have found it more difficult to find work than older people, and have suffered higher falls in real pay.

The report found average incomes of people aged 22-30 fell by 13% between 2007 and 2013, compared with 7% for people aged 31-59.

The employment rate for young people over the same period fell by 4%, but remained stable for those aged 31-59.

Median real earnings for employees aged 22-30 fell by 15% between 2007 and 2008 and 15% between 2012 and 2013. This compares to a decline of 6% for those aged 31-59.

Jonathan Cribb, research economist at the IFS, said young people were “bearing the brunt” of the recession.

“Pay, employment and incomes have all been hit hardest for those in their 20s,” he said. “A crucial question is whether this difficult start will do lasting damage to their employment and earnings prospects.”

Chris Goulden, head of poverty research at the Joseph Rowntree Foundation, which funded the report, said the “worst is yet to come” for many households as this research does not factor in 2013’s welfare cuts.

“We need a comprehensive strategy and sufficient political will to get to grips with poverty,” he said. “That means addressing low pay, the high cost of essentials, such as housing and childcare, and reform to the tax and benefits system to ensure work is a route out of poverty.”