The coronavirus crisis has caused loss of life, threatened livelihoods, and upended daily life. It has also precipitated swift policy action from governments. Both the economic and health trajectories are fast-moving and uncertain. But even the most cursory of assessments makes clear that there are big age divides in how this crisis has been, and will be, experienced. This makes an intergenerational understanding of what’s going on essential, even as the situation, and the policy response to it, continue to develop. This Intergenerational Audit for the UK – supported by the Nuffield Foundation – provides the first comprehensive assessment of the initial phase of the coronavirus crisis for different generations in Britain.
Our focus – as was the case in our first audit last year and is the case in the broader work of the Resolution Foundation’s Intergenerational Centre – is on economic living standards. However, we are acutely aware that coronavirus poses other threats, for example in relation to health, longevity and social interaction, that are felt most by different (older) age groups from those (of working age) where the economic effects are concentrated. Given the seriousness of these outcomes, it would be incomplete to only focus on one side of this coin. So, this year, we begin with new analysis that explores the health and social effects of the pandemic, and the complex choices governments around the world have faced in balancing them against economic priorities.
Our audit then takes stock of generational living standards differences in Britain according to the latest data. It does this by considering living standards within four domains:
- Jobs, skills and pay
- Housing costs and security
- Taxes, benefits and household income
- Wealth and assets.
In each of these domains, we first assess the different paths of cohort living standards, with a particular focus on the drivers of change over the most recent couple of years. We then zero in on one area where we dig deeper – providing a ‘spotlight’ analysis that seeks to stay on the pulse of what’s changing in Britain today, and move research and policy debates forward accordingly.
- Coronavirus has determined the impacts of the crisis on physical health and social interaction across cohorts, while the nature of the pre-pandemic economy has largely driven the impacts on living standards. This has manifested itself in profound physical health risks to older adults, and a very clear distinction between the economic experiences of pensioners and working-age families during the lockdown.
- The labour market hit has been clearly U-shaped, affecting the youngest and oldest workers most. But policies to support incomes, including the JRS and boosts to benefits, mean that incomes fell most in lockdown for those in their late 40s.
- Consumer debt usage has accelerated for 35-44-year-olds; falling equity prices have dented the wealth of those in their 50s; and there were no particularly clear age differences by age (within the working-age population) in the likelihood of falling behind with housing payments in mid-lockdown.
- Post-lockdown impacts may be more clearly tilted towards the bottom of the age range. By July, younger adults had become the most likely to fall behind with housing payments; young people risk long-term employment and pay ‘scarring’ effects from starting careers in a downturn; the prospects for a post-coronavirus home ownership increase among aspirant buyers appear limited; and the removal of temporary welfare boosts looks set to provide a major drag on the incomes of young and childrearing-age adults.